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Planning Your First Rental Property from Start to Finish (2019 Update)

Purchasing your first investment property is a big step, and it can teach you a lot. You don’t have to learn everything as you go, though. In fact, you can avoid many expensive mistakes if you follow a little bit of good real estate advice before you begin.

Plan the Type of Investment That’s Right for You

First, you absolutely must know what kind of investment you’re going to make before you start looking. New investors can benefit a great deal from help through real estate investment groups, which provide consulting services and may even be able to help match you with the right investment property to meet your goals. The best firms also offer property management services, which can provide important property investment solutions over the long run.

When you go with a turnkey company or group like this, a lot of the process will be automated and streamlined for you. The real estate staff at a good investment group will be very knowledgeable about the areas where you’re investing, how much you want to invest, what kinds of properties best work for your style of investment, and everything else you’ll need to guide you through the buying process.

Research the Areas Where You Want to Invest

Whether or not you choose to invest through an investment firm or group, you should do some research on the area or areas where you’re considering purchasing real estate. You should look at whether they’re growing or deteriorating, whether they are convenient to work, school, and other amenities for the residents there, how quiet the neighborhood is, and how close it is to attractive areas like downtown Dallas.

Look Into Your Investment Options

You should also consider whether you want to take a hands-on or hands-free approach to real estate investment. If you are simply trying to diversify and stabilize your portfolio, you will most likely want to go with an option that allows you to invest your funds without investing a lot of time or energy. In this case, you should probably consider group investment opportunities or managed properties.

For example, with a real estate investment trust (REIT), you will actually buy shares in the trust that represent a percentage of the real estate investment(s) that the trust makes with its members’ capital. When you invest in an REIT, you won’t ever have to lift a finger on any of the properties you have shares in.

Similarly, depending on the firm, when you invest through a turnkey real estate company, you can choose to have the property management team take care of finding tenants, dealing with all maintenance and repairs, and all other issues with the property, as well. In that case, you’ll own the entire property, but you’ll still have someone else take care of all of the day-to-day issues.

So, as you continue to plan how you’ll invest, remember that you have options to pool your resources with others and that you do not have to “be a landlord” in order to own income properties. Either of these options can be effective property investment solutions for you if you want to gain truly passive income through real estate.

Listen to What the Professionals Have to Say

Finally, as your plan begins to gel, don’t hesitate to speak with consultants and/or financial advisors who have experience with real estate investment. These people are professionals and have a great deal more experience with this process than you do. By listening to what they have to say, you may learn about flaws in your plan that you never would have caught (until they cost you a significant amount of capital).

Of all of the real estate advice we could give you, this is some of the best: never be afraid to ask for help. Don’t worry about spending a bit more for expert counsel or to let professionals take care of construction and property management. Your time is better spent looking into new investments than trying to figure out how to lay tile, and you will make better investment decisions with advice from expert realtors and consultants.