Real Estate Investment - Starting Fears

[David Fals]

I've been trying to purchase my first investment property, but I keep stumbling upon fully renovated homes, dated, basic ones, and some not-so-great ones. Is it wrong that I want my first property to look good, like I'd live there? 

Occasionally, I wonder why I should even care about how nice it is since it’s just for rent. What if tenants destroy everything? It's just for rent, and people will always find a place to rent. On the other hand, I worry whether my unit will get rented or stay on the market while I'm paying my personal home mortgage and the rental mortgage, which could drain my cash flow and hurt my investment if I just got a not-so-great unit. 

When I run the numbers, I estimate that I might barely cash flow as an out-of-state investor with property management costing 10%. Am I approaching this the wrong way, or am I just being paranoid, scared, and confused as I try to get into real estate investing on my own?

[Melissa Justice]

@David Fals,

You're not alone - this is a very common struggle for first-time investors, especially when you're emotionally invested in the process. Wanting your first property to be something you'd live in isn't wrong - it actually helps you make better decisions - but it can also cloud judgment if it becomes the main driver instead of cash flow and ROI. Here's how I'd break it down:

1. Focus on Cash Flow First
As an out-of-state investor, your priority should be consistent cash flow. Properties that “look good” are great, but if they tie up too much capital or don’t cash flow after management fees, you’re setting yourself up for stress.

Sometimes a slightly dated or basic property can generate stronger cash flow and appreciation potential, especially in Midwest or Southeast turnkey markets.

2. Don’t Sweat Tenant Wear & Tear
Tenants will use your property, but that’s what property management and reserves are for.

You can mitigate risk by screening tenants carefully, requiring security deposits, and purchasing landlord insurance that covers damages.

Some investors choose properties that are easier to maintain and more “neutral” in finishes for this reason.

3. Out-of-State Considerations
You’re relying on property management, so simplicity is key. A property that’s “good enough” to rent quickly, with durable finishes, is often better than a show-home that requires constant attention.

High-end features can be nice, but they don’t always translate into higher rent or occupancy, especially in price-sensitive markets.

4. Emotional Attachment vs. Investment Logic
Wanting a property to be nice is fine - it helps with pride of ownership - but if it compromises cash flow, it’s better to step back.

One approach: find a property that’s attractive but not extravagant - something functional, safe, and rentable. You can always upgrade over time if the cash flow allows.

5. Recommended Approach
Run the numbers first: purchase price, rent, management, maintenance, and mortgage. Make sure you’re cash flow positive.

Use turnkey or slightly upgraded properties in cash-flow-friendly markets (Midwest/Southeast are perfect for this).

Accept that your first property might not be Pinterest-perfect and that’s okay. Focus on learning, systems, and scaling.

Bottom line: Your approach isn’t “wrong” - it’s smart to care - but don’t let aesthetics override cash flow and risk management. Think in terms of income, occupancy, and scalability, and let cosmetic upgrades come later once the property is producing steady cash flow.

Always happy to share turnkey markets in the Midwest and Southeast that have worked for other investors where properties cash flow well and are also visually appealing without breaking the bank. Best of luck!