What Makes a Rental Property a Good Deal When the Numbers Get Tight?

Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes

A property can look attractive on paper, but what happens when property taxes increase, insurance premiums jump, or an unexpected repair wipes out several months of cash flow?

Im curious how investors account for those realities before buying.

Do you prioritize:

* Strong cash flow from day one?

* A larger reserve fund for unexpected expenses?

* Buying below market value to create a safety margin?

* Long-term appreciation, even if the monthly returns are modest?

And here's the question Im especially interested in: What’s one expense or risk you wish you had paid more attention to before your first investment property?

I think newer investors could learn a lot from the experiences of those who’ve been through a few market cycles. What’s your take?

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John RacinePro Member

Rental Property Investor · Casselberry, FL · Member since 2008 · 148 posts · 81 votes

Marisol, there's a common saying that you make money when you buy. Buying below value will always be a priority, but those deals aren't common, so you can't build your plan around finding one. Most of the protection has to come from how you run the property after closing.

If one large repair wipes out several months of cash flow, the repair usually isn't the real problem. It's a sign of something else: not enough in reserves, a poor inspection, or maintenance that was put off. So before buying, I'd look hard at two things:

What's actually being set aside for reserves each month, and is it enough for the age and condition of the property?
What a regular, budgeted maintenance schedule would cost. HVAC servicing, roof checks and plumbing inspections are cheap compared to the emergency they prevent.

On taxes and insurance going up, raising rent to offset them is a tough call when the market says otherwise. Push past market rent and you trade higher expenses for vacancy. So I'd ask what you can control:

Does it make sense to dispute the assessed value with the tax authority? If the assessment came in high, an appeal can bring the bill back in line.
If the owner pays the utilities, can they be converted to tenant-paid? That usually happens at a new lease or renewal, and on multifamily it may take separate meters.

A lot goes into it, but the market will decide where your rent lands. The better question is what you can do within the market rate to keep the deal working.

When you're working with investors in Dallas, are you seeing many of them protest their appraisals?

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Chris Colton
Investor · San Antonio, TX · Member since 2026 · 64 posts · 31 votes
4d
Good question. For me the margin matters most. If a place only works on perfect numbers, it is too tight. Taxes and insurance in Texas can move a lot, so I want a deal to still make sense after I plug in higher numbers for both before I buy. Reserves are right behind that. A roof or AC problem should not wipe you out. The expense I wish people watched closer is insurance. It gets treated like a small line item and then it jumps at renewal. I am still learning as I go, but checking those two numbers hard up front has helped me walk away from deals that only looked good at first glance.
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- Hajra Wajid
  Technology · OH · Member since 2026 · 11 posts · 3 votes
  4d
  @Chris Colton getting the insurance quote before you fall for the deal is such a simple habit, and most people do it the other way round..... In Texas, do you see the quotes move more by zip code or by the age of the roof?
  0 Reply
- Chris Colton
  Investor · San Antonio, TX · Member since 2026 · 64 posts · 31 votes
  4d
  Thanks Hajra. For what I see here in Texas, it is both, but roof age surprises people the most. A roof that is getting older can move a quote a lot, or even make a carrier say no. Zip code matters too, especially for weather risk. That is why I try to get the quote early, with the roof age in hand, before I get attached to the numbers.
  0 Reply
- Hajra Wajid
  Technology · OH · Member since 2026 · 11 posts · 3 votes
  3d
  @Chris Colton makes sense, the roof is the one number sellers almost never mention up front..... Do the carriers there want a real roof inspection, or is the age from the seller enough to get a quote?
  0 Reply
- Chris Colton
  Investor · San Antonio, TX · Member since 2026 · 64 posts · 31 votes
  3d
  For me the age has been enough to get a quote started. I have not needed a full roof inspection just for that first quote.
  A carrier could ask for more later, especially on an older roof, so I treat that first quote as a check, not the final word.
  0 Reply
Marisol Gallegos
OP
Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes
4d
@Chris Colton That’s a really good point. I agree that a deal should still make sense when you use more conservative numbers, rather than relying on everything going perfectly. Insurance is especially easy to underestimate until renewal time, and a major repair can quickly eat into your returns. I like that you’re building those checks into your decisions. Have you found that insurance costs have changed your approach to evaluating properties in TX?
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- Chris Colton
  Investor · San Antonio, TX · Member since 2026 · 64 posts · 31 votes
  4d
  Thanks Marisol. Yes, it has for me. I used to check insurance later, after I already liked the deal. Now I try to get a real quote early here in Texas, before I trust the numbers. If the quote makes it too tight, I would rather know that up front. I am still learning, but checking it early has helped me walk away from deals that only looked good at first glance.
  0 Reply
Shahzana Ripp
Realtor · Naperville, IL · Member since 2026 · 2 posts · 0 votes
4d
I wouldn't focus on any of these alone. I'd want my cash flow to be good enough that the house doesn't require all the stars to align. But I would want some cash left after purchasing the property as well.
Buying under market value is nice. Just make sure you know why you're buying under market value. The house may need a roof, HVAC, windows or something else that could quickly kill your numbers.
Another area to look at is the cost of owning that specific property. Some areas have high property taxes, so I would want to know what they're currently paying in taxes. I'd also look at insurance and the home's major systems to see what I'd be comfortable paying.
Appreciation would be a benefit, but I wouldn't want that to be my main reason for buying a property if the cash flow is already tight.
When starting out as an investor, always make sure you're aware of the home's major systems. The house may look like a good deal until you find out the roof or something else expensive may need to be replaced soon.
I would rather buy a house that gives me a little cushion if things don't go as planned.
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- Marisol Gallegos
  OP
  Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes
  4d
  @Shahzana Ripp I agree with you, especially about having some cash left after the purchase. A property can look great on paper, but one major repair or a jump in insurance can quickly change the picture. I also like your point about understanding why a property is priced below market value rather than assuming it’s automatically a bargain.
  
  But as you’ve gained experience, have you become more cautious about older properties, or do you still see them as worthwhile opportunities when the numbers leave enough room for repairs?
  0 Reply
Jeff Roth
Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 475 posts · 262 votes
4d
Hi Marisol from Dallas-
Great question! You asked how to buy investment real estate with room for things like property tax increases, insurance increases, unexpected repairs, or extended vacancy.
You always want to buy as well as possible. Below market and ideally paying tenants with a good payment history paying below market rents with value add opportunity that cash flows when you buy it.
Consider starting with duplexes as you should always have a rent check coming in. Then, improve units when they become vacant increasing rents and property value. This should insulate you from increases in expenses as much as possible and it is always wise to keep a healthy reserve account.
One of the biggest risks you can face when investing is counterparty risk or other people in the deal like contractors or bad tenants. Do your due diligence as much as possible.
To Your Success!
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- Marisol Gallegos
  OP
  Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes
  4d
  @Jeff Roth That's a valuable perspective. I especially like the point about counterparty risk because even a well-underwritten property can become a headache if you have unreliable contractors or tenants. The idea of starting with a duplex and improving units as they become vacant is interesting too.
  Have you found that duplexes generally give you more flexibility when managing unexpected expenses, or does it really depend on the market?
  0 Reply
John RacinePro Member
Rental Property Investor · Casselberry, FL · Member since 2008 · 148 posts · 81 votes
4d
Marisol, there's a common saying that you make money when you buy. Buying below value will always be a priority, but those deals aren't common, so you can't build your plan around finding one. Most of the protection has to come from how you run the property after closing.
If one large repair wipes out several months of cash flow, the repair usually isn't the real problem. It's a sign of something else: not enough in reserves, a poor inspection, or maintenance that was put off. So before buying, I'd look hard at two things:
- What's actually being set aside for reserves each month, and is it enough for the age and condition of the property?
- What a regular, budgeted maintenance schedule would cost. HVAC servicing, roof checks and plumbing inspections are cheap compared to the emergency they prevent.
On taxes and insurance going up, raising rent to offset them is a tough call when the market says otherwise. Push past market rent and you trade higher expenses for vacancy. So I'd ask what you can control:
- Does it make sense to dispute the assessed value with the tax authority? If the assessment came in high, an appeal can bring the bill back in line.
- If the owner pays the utilities, can they be converted to tenant-paid? That usually happens at a new lease or renewal, and on multifamily it may take separate meters.
A lot goes into it, but the market will decide where your rent lands. The better question is what you can do within the market rate to keep the deal working.
When you're working with investors in Dallas, are you seeing many of them protest their appraisals?
2 Reply
- Marisol Gallegos
  OP
  Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes
  4d
  @John Racine You make some really good points here. Its smart to point out the distinction between what happens at purchase and how the property is managed afterward. Strong reserves and routine maintenance can make a huge difference, and I agree that simply raising rents isn’t always realistic when the market won’t support it.
  On the Dallas side, appraisal protests are definitely worth paying attention to, especially when property taxes have such an impact on the numbers. I haven’t kept track of how many investors are actively protesting, though. Have you seen many investors get meaningful reductions through the appeal process?
  0 Reply
- John RacinePro Member
  Rental Property Investor · Casselberry, FL · Member since 2008 · 148 posts · 81 votes
  4d
  Thanks @Marisol Gallegos
  0 Reply
James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 683 votes
4d
Marisol, for me it is buying below market, and it is not close.
At 236 properties in Memphis, my safety margin is built on day one: single-family under $100K going in, ARV $180K to $265K when the rehab is done. That gap is what absorbs a tax increase, an insurance jump or a dead water heater. If I pay retail, every surprise comes straight out of cash flow.
After that, rent has to clear the 1% rule, and for a 3BR the Section 8 band here is $1,395 to $1,950. If it only works at the top of that band, it does not work.
The expense I wish I had watched earlier is simple: the all-in number, not the purchase price.
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- Hajra Wajid
  Technology · OH · Member since 2026 · 11 posts · 3 votes
  4d
  @James Jones "the all-in number, not the purchase price" is the cleanest way I've seen it put....... With 236 doors I'm curious, do you track rehab budget vs. actual across the portfolio? I'd guess the gap between those two has taught you more than any calculator.
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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4d
Rationalization
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Sheldon DavidBusiness Member
Technology · Rockville MD · Member since 2026 · 13 posts · 2 votes
4d
Marisol, I think the key is understanding how much room a deal has for things to go wrong. Cash flow, reserves, and buying below market all help, but they solve different problems. Reserves can cover a rough year; they don’t fix a property that consistently loses money.
One expense I’d flag is turnover. Vacancy, repairs, cleaning, and leasing costs can hit together. A property showing $300/month in cash flow only produces $3,600 annually, so a $4,000 turnover can erase more than a year of projected income.
That’s part of what we’re working to help investors evaluate with PropertyIQ: looking beyond the headline return and understanding the assumptions behind the numbers. I’m involved with the platform, so sharing that connection openly.
My question when evaluating a tight deal would be: if rent comes in lower and expenses come in higher, am I still comfortable owning it?
Do you typically test those risks individually, or model a rough year where several happen together?
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Lauren CutchenBusiness Member
Real Estate Agent · The Woodlands, TX · Member since 2019 · 226 posts · 84 votes
4d
@Marisol Gallegos great question. Up here in north Houston the one I see bite people is property tax. Investors forget there's no homestead on a rental, and a lot of the newer subdivisions have a MUD on top, so the seller's tax bill can be way lower than what you'll pay. I pull the actual rate for that address and plan to protest every year. Insurance is the other one, and it varies a lot neighborhood to neighborhood, even east of Conroe vs. further north.
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- Marisol Gallegos
  OP
  Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes
  4d
  That’s a great point. I think property taxes can easily get overlooked when investors focus too heavily on the purchase price and projected rent. The MUD tax is especially worth checking before running the numbers. I also like your approach of reviewing the actual rate for each address. Have you deduced that these tax and insurance differences have made you walk away from otherwise attractive deals?
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- Hajra Wajid
  Technology · OH · Member since 2026 · 11 posts · 3 votes
  4d
  @Lauren Cutchen the MUD point is a good one, and it's easy to miss because the listing's tax estimate often doesn't show it. The appraisal district sites are usually the fastest place I've found to see every taxing unit stacked on one parcel....... Do you pull it from there, or from the MUD's own rate notice?
  0 Reply
- Lauren CutchenBusiness Member
  Real Estate Agent · The Woodlands, TX · Member since 2019 · 226 posts · 84 votes
  3d
  @Hajra Wajid honestly both. I start with the appraisal district (HCAD, or MCAD up here in Montgomery County) so I can see every taxing unit stacked on the parcel, then I double check the MUD's own site or the county tax office, since new rates get adopted in the fall and the appraisal district can lag. Rates vary so much neighborhood to neighborhood around Conroe and The Woodlands that I never assume.
  [email protected]832-406-4239
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Addy Chupa
Developer · Member since 2024 · 68 posts · 23 votes
4d
The one I wish more new investors priced in: property taxes resetting after the sale. In a lot of states the seller's tax bill reflects years of capped or old assessments, and the county reassesses at your purchase price the next year. Underwriting off the current bill can make a deal look $150 to $300 a month better than it really is.
A few quick checks I'd run before calling a tight deal "good":
- Recalculate taxes at your purchase price using the local rate, and get a real insurance quote, not last year's premium.
- Stress test it: raise taxes and insurance 10%, add one month of vacancy, and see if it still covers itself. If one bad assumption flips it negative, it isn't a margin, it's a hope.
- Size reserves to the building, not a flat number. A 30-year-old roof and original HVAC need a bigger monthly set-aside than a recent rehab.
If it still works after all that, a tight deal can be fine. If it only works on the seller's numbers, I'd pass.
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- Hajra Wajid
  Technology · OH · Member since 2026 · 11 posts · 3 votes
  4d
  @Addy Chupa the reset is the one I see people miss most. One thing I'd add to your stress test: check when the county's next reappraisal is due. Underwriting at your purchase price fixes the reset, but a reappraisal year can move the bill again 12 months later..... Do you build that in separately, or treat it as part of the 10% bump?
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Hajra Wajid
Technology · OH · Member since 2026 · 11 posts · 3 votes
4d
@Marisol Gallegos I'll add one from the data side, because I spend most of my days in county records.......
The surprises that hurt are usually already sitting in public records before you buy. The listing just doesn't show them. Before I trust a tight deal I'd pull three things for that parcel:
1) The assessment history, not just this year's bill. In Ohio, for example, counties reappraise every six years with an update in between, so if a reappraisal is due next year, today's tax number is already out of date. Addy's point about taxes resetting at your purchase price stacks on top of that.
2) Special assessments and anything certified to the tax bill. Some cities add unpaid water and sewer charges, weed cutting or demolition costs straight onto the property tax. They stay with the property, not the seller.
3) Permits and code cases. The permit history tells you if that roof or furnace was actually replaced or just "updated". An open code case means a deadline and a fine you inherit.
All of it is free on most county auditor and city sites..... and it's exactly the stuff that turns a $300/month deal into a $50/month deal.
So my answer to your last question: the expenses nobody quotes you. The ones attached to the parcel, not the house.
1 Reply
- Marisol Gallegos
  OP
  Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes
  4d
  @Hajra Wajid This is an excellent point. I think investors can get so focused on the house itself that they overlook what may already be attached to the parcel. The permit history and special assessments are especially worth checking before closing. I like the idea of making these public-record checks part of the standard due diligence process. Have you seen many deals fall apart because of something an investor discovered in the county records?
  0 Reply
- Hajra Wajid
  Technology · OH · Member since 2026 · 11 posts · 3 votes
  3d
  @Marisol Gallegos honestly I'm on the data side, so I see the records more than the closings..... but the same problems show up again and again. When I pulled Franklin County, Ohio, there were 1,122 properties with tax liens on them, and none of that shows on a listing. The other common one is the name on the tax bill not matching the latest deed, usually after someone passed away.
  Do you check that kind of stuff early with your investor clients, or does it usually wait for the title company?
  0 Reply
Rebecca MillerPro Member
5000 Riverside Dr. BLD 5 STE 100W Irving, TX 75039 · Member since 2026 · 14 posts · 10 votes
3d
Great question. When margins get tight, I think the biggest factor is creating a margin of safety before you ever close on the property.
For me, buying below market value is still the foundation. You can’t control future tax increases, insurance spikes, or unexpected capital expenditures, but you can control your basis. Acquiring a property with built-in equity gives you more options when market conditions change.
That said, I’ve also become more focused on cash flow resilience than just cash flow. Instead of asking, “Does this property work today?” I ask, “Does it still work if insurance goes up 25%, taxes are reassessed higher, or I have a major repair in year one?”
One strategy I find interesting in today’s environment is looking for ways to increase a property's income potential rather than relying solely on appreciation. Some investors are converting value-add properties into co-living rentals, adding bedrooms where appropriate, or pursuing other strategies that can create stronger cash flow from the same asset. The more income flexibility a property has, the better positioned it may be to absorb rising operating costs.
As for overlooked expenses, I think many first-time investors underestimate capital expenditures. Roofs, HVAC systems, plumbing issues, foundation repairs, and turnover costs don't show up in the initial excitement of running the numbers, but they can have a major impact on returns.
If I had to rank priorities today, it would be:
1. Buying at the right price (creating a safety margin)
2. Maintaining adequate reserves
3. Ensuring the property can generate sustainable cash flow
4. Treating appreciation as a bonus, not the primary investment thesis
Real estate cycles have taught me that investors who survive and thrive are usually the ones who build multiple layers of protection into the deal from day one.
[email protected]281-630-9675
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James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 683 votes
3d
Hajra, yes — every rehab, budget next to actual, line by line.
That gap is the whole education. At one or two houses, a rehab that runs over budget is a bad month. At 236 it is a system problem, and the pattern shows up in the same places: the big items I did not open up and verify during the walk, and the scope that grew after the crew started.
So the actuals set the next budget, not the other way around. A contractor who beats his number gets the next house. A line that runs over, house after house, gets priced at the real number from then on — or the house does not get bought. That is also why I test every deal on the all-in. If the rehab budget is a guess, the all-in is a guess, and the 1% test on top of it means nothing.
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Ryan BrownPro Member
Real Estate Agent · Louisville, KY · Member since 2022 · 100 posts · 32 votes
3d
Marisol, one thing I’d add is that the highest rent doesn’t always produce the best return.
I’ve had rentals with very little ongoing maintenance where one expensive turnover wiped out the cash flow. Because of that, I’ve definitely cut good tenants breaks on rent to keep them. Someone who pays consistently and takes care of the property can be worth much more than another $100 a month.
That extra $1,200 a year can disappear quickly between vacancy, repairs, cleaning, and getting someone new in—and you don’t know whether the next tenant will be as good.
So beyond checking the purchase numbers, I’d look at what it will take to keep the property occupied and the tenants happy. If a deal only works by collecting top-of-market rent every month with no interruptions, I’d consider those numbers too tight.
[email protected]502-889-0122
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Rachel Mazzanti
Virtual Assistant · Remote · Member since 2020 · 139 posts · 56 votes
3d
The deals that look fine in January and tight in December usually aren't victims of the market. They're victims of lumpy bills.
Taxes and insurance don't hit monthly, so a property can look like it's cash flowing all year and then get wiped out by one renewal. My company accrues for both every month in the books, so the per-property P&L shows the real cost in July, not just in the month the bill lands. Same with reserves. The reserve money moves into its own account when rent clears, per property, so the operating balance never lies about what's spendable.
That monthly view is the whole trick. If you only check the numbers at renewal time, you're always reacting. If you watch a per-property P&L every month with taxes, insurance, and reserves already baked in, you see the squeeze coming three months early, while you still have options. A deal that only works on perfect numbers isn't a deal. It's a hope with a spreadsheet attached.
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Joseph ScoreseBusiness Member
Banker · Philadelphia · Member since 2009 · 2k+ posts · 646 votes
2d
Great question, Marisol! After more than 20 years in mortgage and private lending, I've learned that a good rental investment isn't necessarily the property with the highest projected return. It's the one that can withstand the unexpected and still perform.
My priorities would be positive cash flow from day one, adequate liquidity reserves, and purchasing at a price that provides a margin of safety. Appreciation is certainly a benefit, but I wouldn't build an investment strategy around appreciation that hasn't happened yet.
One expense I believe investors consistently underestimate is vacancy and turnover costs. It's not simply losing a month's rent. It's the combination of lost income, repairs, utilities, leasing expenses, and carrying costs while the property sits empty.
I also encourage investors to stress-test their numbers. What happens if taxes and insurance increase 15%, rents remain flat, or the property sits vacant for 60 days? Does the investment still make financial sense?
My philosophy is simple: You make your money when you buy, protect it through disciplined underwriting, and build wealth through sustainable cash flow.
The best investment isn't always the one with the greatest upside. Sometimes it's the one with the strongest downside protection.
Joseph V. Scorese
Nationwide Direct Private Lender | Real Estate Educator & Strategist
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Muyees Ayilara
Lender · Boynton Beach, FL · Member since 2026 · 182 posts · 73 votes
2d
Marisol, I deal with this every week on the lending side in Florida, and tight numbers are where most deals actually fall apart.
For me it is cash flow first. If it does not cash flow on day one with real numbers, I pass. Not pro forma rent, not best case taxes. I use the actual tax bill, the actual insurance quote, and I add 10% for vacancy and 8 to 10% for maintenance. If it still works after that, then I look at the rest.
Second is buying below market. That is your real safety margin. If you buy at ARV and taxes go up, you have nowhere to go. If you buy 15 to 20% below, you can take a hit and still refinance or sell without losing money.
Reserves are third for me, but they are non negotiable. I tell every borrower to have at least six months of PITI sitting aside after closing. Not for the deal, for life. One AC and one vacancy in the same month will wipe out a new investor who has no reserves.
Appreciation is last on my list. I have seen too many people buy for appreciation in Florida and get stuck when insurance doubled. If appreciation happens, great, it is a bonus. I never underwrite for it.
The one expense I wish I had paid more attention to early on was insurance. Especially here in South Florida. I have seen quotes go from $1,800 a year to $4,200 on the same house in two years. That alone can turn a good deal into a negative one. Now I get the insurance quote before I even make an offer.
If you are looking at a deal right now, run it with the higher insurance and higher taxes, not last years numbers. If it still cash flows, it is probably a real deal.
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Rafael Powell
Member since 2026 · 1 post · 0 votes
2d
I stress-test taxes and insurance before buying, keep a solid reserve fund, and always get an insurance quote early. The biggest surprise for me was how much roof age raises premiums.
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Anthony Smith
Real Estate Agent · Detroit, MI · Member since 2016 · 107 posts · 55 votes
1d
Buying below market is my whole margin, and I don't mean a discount off asking — I mean purchase plus rehab at or under 70% of an ARV verified from closed comps on the same street. That spread is what absorbs the tax jump, the insurance renewal, and the dead water heater landing in the same quarter. The expense I wish I'd watched first is the tax bill after the sale: in Michigan the taxable value uncaps when a property sells, so the seller's bill understates yours, sometimes by hundreds a month, and it has killed more of my early 'deals' than any repair ever did. Second is insurance — quoted in writing before the offer, not estimated, because carrier appetite for older rentals moves that number more than any other line on the sheet. If a deal only works at the seller's taxes and a guessed premium, it doesn't work.
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Richard NeesePro Member
Rental Property Investor · South Vinemont, AL · Member since 2026 · 58 posts · 20 votes
1d
Great questions! I'll give my insight. Understanding the actual rental rates is important. Too many investors go on best case numbers. Don't factor in true capex and maintenance and take on thin margins based on best cases. Be conservative. Underwrite a ton of deals. Buy the good ones . Temper expectations and be ready when you hit your acceptable numbers. Make it data driven not emotional. Thanks for contributing to our community
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
1d
Predictability...
[email protected]248-209-6824
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Clifton HarrisBusiness Member
Property Manager · Pigeon Forge, TN · Member since 2026 · 9 posts · 1 vote
8h
You can buy at a good price and have reasonable projections, but inefficient operations, deferred maintenance, unexpected repairs, and poor expense management can quickly eat into your margins.
I'd also be careful about relying too heavily on the seller's historical operating expenses. I'd want to understand what it actually costs to maintain and operate the property under my ownership, including realistic maintenance reserves and insurance costs.
Disclosure: I work at Kindful.co, a vacation rental management company.
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Cameron TopePro Member
Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
54m
Marisol,
I've been buying rentals for almost 15 years and my goals, and therefore, priorities changed over the years.
When I first started, I prioritized cash flow because I didn't want the income from my job to be eaten up with rental losses.
In the past few years, I now prioritize appreciation - buying quality assets in desirable areas.
"What’s one expense or risk you wish you had paid more attention to before your first investment property?"
The risk of rising property taxes and insurance, but I don't see that being as much of an issue for the next few years.
For new investors, the biggest risk I see is buying a "good deal" in a less desirable area. Just because it's cheap doesn't mean it's a deal!
With high inventory levels, and thus increased competition, tenants have more options.
With more housing options for tenants, attracting and retaining quality residents will be the biggest risk in the years ahead.
Just my 2 cents...
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