VIDEO DIALOGUE: Let’s talk about how to get started in rental properties. Quick disclaimer, I’m not a mortgage broker, I am a real estate agent, and I own property myself. Now these points aren’t really in particular order, because you need to do them all before you get started, so let’s just dive in.

Firstly, establish your goals with renting. It’s a business like any other, and though some people just fall into it because maybe they inherit a property or something, they typically won’t stay in the game for long. When are you going to buy your first rental? Do you want to do it this year?

You need to know how much you want to make a month from your properties because that will tell you how much property to buy, where to buy them and how much to spend on those properties. Which brings me to my next point.

Get money. You don’t necessarily need an investor to be an investor. You can get a conventional loan on your own and rent the property out from day one, so what you need is a mortgage broker – because they can tell you how much house you can afford.

If you don’t know who that is, I’ve got a guy, or your buddy that just bought a house has a guy. But, you need to know how much you CAN loan to dictate how much you WILL spend. This can help fine tune your goals and your search.

Lastly, and this is just food for thought. Most investors are looking for a house that can bear the “2% rule”. Which is to say that they want a house that will rent for 2% of the purchase price.

Makes sense right? A little quick math will tell you that you should be able to pay off that mortgage pretty quickly and will be pocketing some good cash. The catch is, when you’re first getting started, that property can be hard to find with the money you CAN spend. Also certain markets are hard to invest in if you’re exclusively looking for this type of property.

So, as an agent I have two recommendations / thoughts:

One – Remember that owning property isn’t all about how much you can make on the rent. Long term rentals are a great long term investment because property generally goes in an upward direction in value. Short term rentals like AirBNB or temp living spaces can accrue more money on a short term basis, but also can be harder to manage. You need stamina in this game.

Two – BiggerPockets.com. Just go there, look it over – they have awesome podcasts you can subscribe to at any time, and tons of great resources for hungry real estate investors. It’s a resource unlike any other that will dive much deeper than I can today.

I hope this helps. And if you need someone to aid you in your search in middle Tennessee, or hell just want to talk shop about investing in property wherever you are, please give me a call – I love this stuff! I hope to hear from you soon, and I’ll see you next week!