When you think of getting into real estate do you picture yourself as Joanna Gains or Scott McGillivray buying, planning, decorating and 30 mins later - bibbidi-bobbidi-boo - your space is bright, beautiful and pinterest perfect. Real estate can be a fun, profitable and great investment. It can also be a great form of business education with a side of DIY-bootcamp. These tips to buying your first rental property are a great place to start.
With the right plan and approach, buying your first rental property can be an open door into the entrepreneurial space. Essentially allowing you to buy a property with the potential for a constant stream of income if managed properly.
If you are thinking about diving in, I have 5 tips for you to think about before starting your own real life HGTV experience!
1.Talk about it
Simple as that. Just start talking about it. With your friends, family, colleagues, people. Don’t make it THE ONLY topic you talk about, but mention that you are thinking of getting a rental property. See what they think. This is a great way to get ideas from people you respect and trust. Maybe they know of a real estate agent you could connect with, or a person selling their home, or maybe they know someone who is a landlord who you could meet up with.
They also might be the Debby-Downer and rain on your parade. Tell you all the horror stories about real estate, being a landlord and all the nightmare tenant stories they’ve heard about. That’s great… and true… It’s not all rainbows and dolla-bills raining from the ceiling. But, don’t let it discourage you.
2. Talk to someone who is already doing it
If you don’t already know someone with income properties, hopefully by talking about it you will be able to make some contacts with people who are. Reach out to them. The best people to learn from are those who are already DOING what you are interested in, or at least are a few steps ahead of you.
Some great questions to ask are: how did they get started, why did they get started, what would they do differently if they could do it over again, what’s the biggest struggle, what should you do when just starting out.
Don’t feel shy or like a bug. Most people love talking about their successes (and themselves), they will probably be flattered.
3. Get clear on why you are interested
There are a lot of reasons for owning property that you don’t live in, like:
- entrepreneurial experience
- buying the property for the future (why not have someone else pay the mortgage while you're not using it)
By being clear on WHY you want to buy an income property you will be in a better position to filter opportunities. Once you start talking to others about your interest, you will find that opportunities will present themselves. Without being clear on “your why”, you may make poor choices or not be able to develop the skill of asking the right questions.
4. Get clear on your finances and limits
This is the part where you can rain on your own parade. BUT don’t get stuck in this pity party long. Get your wallet and bank accounts cheering for your success by getting organized and making a WRITTEN OUT plan. Crunch the numbers. What kind of savings amount would be appropriate? What type of account should you be saving in? What would be a manageable mortgage balance? What would the rent have to be?
Talk to a financial advisor, they may have some tips and saving strategies to help you with your goal.
This clarity will start shifting your *thinking* of getting into real estate to PLANNING to get into real estate. There’s a big difference. Once your plan is made and in place you will feel the momentum. Your choices will start to align to your plan and you will start achieving the things you wondered how others were doing it.
The final and SUPER IMPORTANT tip to getting started is to practice patience. Don’t jump into it. Make sure you are making wise choices. Analyze your options and do your own due diligence, trust your gut and talk it through with someone (maybe the person from Tip #2).
Real estate can be intimidating. But if it’s something you’ve been thinking about for awhile, I encourage you to start with these 5 steps. If you see others acquiring properties and are thinking to yourself… “how are they managing that?!” it’s because they are taking baby steps behind the scenes.
Take your baby step today!
If you have any specific questions or would just like to reach out, I would love to hear from you and what baby step you are going to take today.