You’ve decided this year will be your year. It’s finally time to jump in and buy your first rental property. Passive income is calling! But wanting to invest in real estate and actually doing it are two different animals. Sometimes, the practical steps to get it done are mysterious, especially for new and inexperienced investors. 

Never fear – we’re here to give you a step-by-step action plan.

7 Steps to Buying Your First Rental Property

Step #1 – Schedule a consultation with a portfolio advisor.

First things first, we recommend scheduling a call with an REI Nation portfolio advisor – or the advisor with your turnkey partner of choice. What this call will do is clarify what you actually need to get started. You’ll have a list of markets, a sense of how much capital you need, and an idea of how this process works. You’ll also go over your goals and desires for your investment experience. This will determine whether or not turnkey SFR investing is the right fit for what you want.

Speaking to an advisor will give you realistic numbers to work with and clarity on where to go next.

Step #2 – Figure out what you want.

You’ll surely go over this with your advisor, but it’s still a critical step. What do you want out of your investment portfolio? There’s a reason you’ve chosen to pursue SFRs. What is it about this model that serves your best interests? What do you want your portfolio – and the individual properties within it – to do for you? From there, consider future scaling. What steps will serve your short- and long-term goals? Don’t get distracted – focus on these first. 

Step #3 – Identify your preferred lender.

Your turnkey partner should have a list of preferred lenders. This will make the whole process smoother. In general, you’ll want to work with lenders who are familiar with investors. Others may be more wary of the perceived risk of working with investors utilizing more leverage than the average buyer.

Step #4 – Get your finances in order.

Now begins what should be a somewhat standard process: buying a house. You’ll first need organized financial documents to secure pre-approval and final approval from your lender. Secure and set aside your downpayment amount and know what other costs to expect from closing. Remember, demand is high – the more agile, organized, and motivated you are, the better your chances.

Step #5 – Narrow down your options.

You’ve found a lender. You’ve been preapproved. Work with your turnkey provider to narrow down and select an initial investment market. You want to target reliable and steady markets – not ones with extreme fluctuations (even positive ones!). From there, consider individual properties. Size, layout, neighborhood, and amenities all matter. 

Step #6 – Buy!

Once you have a specific property in mind, buy it! Even if this property is hand-selected by a turnkey company, do your due diligence. Don’t skip any necessary inspections or provisions. One of the biggest mistakes you can make is waiving these procedures and conditions in hopes of winning the bid. Don’t compromise on the terms that protect you and your investment.

Step #7 – Establish property management.

This step will vary depending on how you went about this process. If you partner with a turnkey provider, they should have property management lined up for you. Regardless, establish communication with your management team. Know how they operate, ask questions, and determine how you’ll receive updates and provide authorization for major expenses.

Your property management team will handle getting residents in place and caring for your property. Be sure your vision and standards are aligned. 

You don’t need to be intimidated by the process of buying your first investment property. While it can be overwhelming and involve plenty of room for error, you can avoid so many of the headaches and pitfalls simply by working with a turnkey provider. Leverage their expertise. Use it to your advantage. And, if you ever feel stuck or unsure of what to do next, your portfolio advisor will guide you every step of the way.

Investing in single-family rentals isn’t difficult – so don’t make it any more complicated than it needs to be!

Ready to start your turnkey investing journey? Tap the button below to speak to one of our portfolio advisors.