Investing in real estate can be a wonderful thing to add to your financial portfolio.
I have been investing in real estate since 2006 and currently own 2 rental homes in Round Rock. My personal experience, as well as working with lots of home investors over the years, have taught me some of the best strategies necessary to make your investing experience as successful as possible.
Here are the 8 steps to buying an investment home.
- When I work with investors to find a home to buy, I analyze the neighborhood market prices, the trends, turnover rates, rental rate trends, foreclosure history, and many other factors that can help determine whether, over the course of time, it will give you a good return on your investment.
- Once you find a home and we have it under contract, I can then begin helping you prepare it for the rental market. Whether you want to paint, replace flooring, or just need some simple repairs. I can offer recommendations of some vetted vendors.
- Once you set a monthly rental rate, I will market the home to prospective tenants in the multiple listing service (MLS) which is the data base for Realtors, and many public websites such as Realtor.com, Zillow.com, Trulia.com, and AustinHomeSearch.com in order to get it as much exposure online as possible
- When we have an interested party, I will have them fill out an online application and submit an application fee. The fee will allow us to use a third-party company to process the application. They will do a background check, which will include rental history and criminal background, credit score and job employment history. They will also verify income
- Once the background report comes back, we will discuss the pros and cons of the applicant’s history. I will offer my recommendations. We want to find you tenants that will not only pay the rent on time but take good care of your investment as well.
- Once you have approved a tenant, I will prepare a comprehensive, binding 14 page lease with all the terms of the agreement.
- I will coordinate with the tenant on getting you the security deposit (typically one months’ rent) and the first month’s rent.
- I will get your tenants all set in the house. I will get them a key, make sure they have utilities turned on, and will provide them basic instructions on the home, such as when trash day is, where the mailbox is located, etc.
Many of the investors I work with manage their homes themselves. If you would prefer having a licensed property manager, I can provide you the name of a few very good property management companies.