Landlord Know These 4 Things Before Buying Your First Rental Property

Over 80% of landlords own more than one investment property. Each deal brings new learning opportunities and experience. Here are four things you should know before you buy your first investment property.

1.Spend time learning now to avoid costly lessons later.

Research what type of investment property you'd like to purchase. Avoid spending money on get rich-quick seminars that promise immediate results, and focus on learning the fundamentals. The

Bigger Pockets forums have everything you need on nearly every topic. It's just a matter of

searching for it. If you're short on time, you can check out their bookstore. The community vets each title and keeps them free of get-rich-quick schemes and $ 10,000-weekend seminar pitches.

Local investors are an excellent option to learn the ropes from someone who has been through the process. They'll be able to give you insider tips about particular local restrictions, compare rent rates, and more.

2.Learn how to analyze deals using screening quickly.

Now that you've identified what you're looking for, you'll need to dig into the numbers. Rules that make sense in a metro area typically won't work in rural areas and vice versa, so look at each market independently. After you've analyzed a handful of potential deals, you'll get a feel for the numbers that work. You can use those numbers as screening criteria, so you don't have to do a deep dive on every single rental property that comes on the market.

Once you've done some homework, you'll be able to project your cash flow or monthly profits between the rental income and your expenses, and you'll know what makes sense to investigate further. That brings us to our next topic, financing.

3.Prepare your financing earlier than you think you need to.

Now that you've done your research on the property and see there's potential to make a decent return on investment, it's time to get serious about qualifying for financing. Make a list of at least three financing sources, one of which should be a local bank or credit union. It's OK to check in with the bank you have credit cards or checking accounts with, but local banks and credit unions often have great programs for local real estate investors, so they should earn a spot on your list.

4.Don't be emotionally attached to rental property.

This isn't easy on your first rental property. You won't live at this property, so stay focused on the numbers and make sure your offers match the cash flow and projections you analyzed earlier. If this property doesn't work (and it may not, around 70% of initial offers don't), others will. Stay focused and keep analyzing and learning as you go.

If you're considering investing in the Houston area, connect with me on BiggerPockets here: https://www.biggerpockets.com/.... I will be glad to help in any way I can.