How to Purchase Your First Investment Property

Shared by Hello Pam Evans Real Estate

There’s no denying that investing in real estate can be a lucrative venture, especially if you consider the fact that, across time, the market generally produces gains for homeowners. With that, its allure is easy to grasp as it also offers residual income with the security of knowing that you’re in possession of a hard asset.

Still, today’s market can be a challenging place to begin investing in real estate since progressively tight lending standards have increased down payments and made qualification a bit more difficult. With that being said, if you’re looking to purchase a property for the sole purpose of renting it out, the reality is that while it may be difficult the first time, it’s still a possibility for a lot of buyers.

To start along the right path, consider the following steps:

1. INCREASE YOUR REAL ESTATE KNOW-HOW. While it’s imperative to work with an experienced Realtor who can help you through the actual buying process, it’s still important to take responsibility for knowing your fair share about the property industry.

Whether through books, articles, or simply speaking to those more erudite than yourself, take some time to expand your education and ask questions. If you can make peace with the fact that the investment process starts long before you close on a home, you’ll be more willing to take the necessary time to advance your knowledge first.

2. MAKE A COMMITMENT TO YOURSELF. Real estate involves money. A lot of it. Therefore, one of the most important aspects of the process is maintaining a sense of conviction. It’s one thing to say you’d like to own an investment property and another to actually set aside the amount of time and money you’ll need to purchase your first home.

3. WORK FROM A REALISTIC, STRAIGHFORWARD STRATEGY. Plain and simple, your goal is to purchase a property that will cash flow positively within the first year. In other words, your outlay must be less than the property returns to your pocket.

Therefore, make a point to focus your attentions and stick to achievable goals that have smaller margins of error. Many times, this type of scenario will look like diligently saving your money and purchasing a single-family home without feeling the need to “invent the wheel.” Be smart and know your limits.

4. FIND A PROPERTY. While this step may seem like a no-brainer, real estate investment is not simply about finding just any home and renting it out. It’s about finding the right home to increase your profit margin and make consistent, paying tenants a reality.

To do this, while it’s important to have a solid understanding where you’d like your property to be located, it’s also important to get a handle on other homes in the area. You can always start your search online; however, when it really comes time to find the right place, it’s important to utilize the services of a Realtor who understands your goals. Human interaction is important, so work closely with an agent and heed their advice when given.

5. PERSISTENCE, PERSISTENCE, PERSISTENCE. While property investment may seem glamorous, it’s important to remember that it requires a sense of adamant determination to handle the inevitable pitfalls that come along with it. I would be painting a perfect picture if I didn’t say that there would be challenges, such as bad tenants, renovation problems, or permit issues; however, your goal is to continue working towards a solution.

I have always labored under the notion that as long as you stay persistent, you will find success. Accruing your first—or tenth—investment property is no different.

Yes, it can be a challenge, but as long as you remember that your road to earning an income may be a gradual process, you’ll be in a fantastic position to build long-term wealth.

If you’d like to speak to an experienced Realtor about purchasing your first investment property or would simply like a bit of advice, I would love to work with you. Please contact me for more information.

This post was sponsored by Hello Pam Evans Real Estate.