Investing in Dublin rental real estate can be valuable. It also comes with a few challenges. If you thought of investing in your first single-family rental property, there are some things you should know before getting started. By learning as much as you can ahead, you can make the process of buying your first investment property a positive one.
Learn the Trade
Before you start the search for your first investment property, it is important to find out as much as you can about rental property investing from those already doing it. Familiarize yourself not only with the process of buying and owning rental properties – and all that means – but also with the best practices of successful investors.
You can also begin by reading some of the top books for people new to real estate investing. Attend area meetings with business leaders and get to know a local landlord or two; it might be a good idea to read about landlord/tenant laws too. The process of knowing as much as you can about every facet of obtaining and owning rental real estate is the key to successfully making your first investment.
Prepare Your Finances
Along with learning the trade, it’s also important to prepare yourself financially before buying a rental property. If you plan to finance your investment with a mortgage, you should first get your finances in good shape. Optimize your credit score, pay down debt, and have at least a 20% down payment plus closing costs saved up before your first purchase.
Bidding on investment properties can be very competitive, so it’s likewise a great plan to select a lender and get pre-qualified before you make any offers. Doing so will increase your chances of getting the best deal on your first rental property.
Crunch the Numbers
When you are ready to begin searching for your first investment property, there are a few key calculations you will need to use to assess each one. Buying an investment property isn’t like buying a personal residence or even a vacation home: it’s important not to let emotion impact your choice of property. Instead, evaluate potential properties based on things like your expected return on investment (ROI), profit margin, and operating expenses.
Be careful to account for all expenses, including taxes, landlord insurance, repairs, and improvements. You’ll also want to make a comprehensive rental market analysis for each potential property to determine your expected rental rate and the strength of local demand.
Choose a Strategy
Finally, it’s important to bear in mind that there are many not only one but there’s a lot of investment strategies for owning rental properties. Not only should you learn as much as you can about these strategies, but for your first investment, it’s a good idea to choose an investing niche that is beginner-friendly. For example, unless you are a contractor or handyman, it’s best to avoid fixer-upper properties for your first investment.
Furthermore, it’s a good idea to aim for a lower-cost home your first time through the process. A lower-cost rental home can help you experience the full investment process while reducing the overall risk of your investment. This makes it a great starting point for new investors.
Getting started in rental real estate investing can be both exciting and a bit overwhelming – there’s a lot to learn both before, during, and after buying your first investment property. For this reason, one of the best things you can do is have an expert Dublin property manager on your side. At Real Property Management One, we work with rental property investors to find and assess prospective rental properties. Contact us today at 925-495-4953 to learn more.
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