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Updated by Sean Glynn on Jun 08, 2016
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Sean Glynn Sean Glynn
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Rental Investing Checklist

Download list of important steps when purchasing and managing a rental investment property at Agentxo.com!

Feel free to email me any checklist ideas at Sean [at] Agentxo.com!

1

Choose a strong market to find a property

Choose a strong market to find a property

looks at Jobs, affordable cost of living, and favorable home prices to rental costs

2

Consider the type of property you wish to invest in

Consider the type of property you wish to invest in

Each type of property has pros and cons. Single family can be beneficial, although multi-unit locations offer the benefits of economies of scale.

3

Consider the cost of any rehab needed

Consider the cost of any rehab needed

Remember, your focus on a rental property should be durability. Of course, it should be clean and presentable, but try to avoid purchasing premium products that can't sustain "wear and tear" from tenants.

4

Consider ongoing costs

Consider ongoing costs

Such as a mortgage, property taxes, property management, maintanence

5

Property Management Research

Property Management Research

Will you be managing the property yourself? If so, make you are up to speed regarding tenant laws in that area.
If not, make sure you are aware of the costs of property management, often around 10% of your gross rental income. Also, ask the management company what is the typical cost, time frame, and process for a tenant eviction, just in case.

6

Inform Your Accountant of Your Intended Purchase

Inform Your Accountant of Your Intended Purchase

Your accountant can offer guidance on different tax-related information, including benefits, of a particular purchase/investment. (Make sure you are working with an accountant who has experience with real estate investments.)

7

Numbers- Calculate the closing costs

Numbers- Calculate the closing costs

Many title companies have an online calculator to estimate closing cost. Search online for one in the state for which you are investing.

8

Calculate Holding Costs or Tenant Placement Fees

Calculate Holding Costs or Tenant Placement Fees

How long will it take to rehab, if necessary? How long until a tenant is placed?

Often, a "tenant placement fee" is charged by your property management team and is a portion from your tenants first month's rent.

9

Confirm Rental Rates for Area & Property

Confirm Rental Rates for Area & Property

Check sites like Rentometer to gain a sense of local rental rate for properties of your size. (Don't be afriad to ask the real estate agent for comps, as well.)

10

Review Sold Listings for Area & Similar Properties

Review Sold Listings for Area & Similar Properties

Websites like Redfin have options that help you find recently sold comparables in your area. Plug in your properties address and make sure you are comparing apples to apples when looking at other properties (including bedroom, bathroom, sq. ft, distance from target property, and sale date).

You can also ask the representing real estate agent for comps, as well.

11

Decide on Your Funding Strategy

Decide on Your Funding Strategy

How are you paying for the property? Traditional loans may require 20-25% down, and be sure your lender to ask about any and all costs you will incur at closing. If it's a good deal but you don't have the funds, try advertising it to other investors, to see if there are joint venture or private lending opportunities.

12

Tenant Screening

Tenant Screening

Background checks, credit history, and contacting former landlords are a great way to gain a better understanding of any potential tenants. If using property management, make sure you are aware of their process.

13

Decide Tenant Procedure & Potential Incentives

Decide Tenant Procedure & Potential Incentives

If you're planning on using a property management company, talk to them about potential property management procedure they have found successful. For example, how long of a "grace period" will you allow for a late paying tenant? Will you apply a daily late charge? Do you want to use financial incentives if they provide on-time payment for a certain number of months?

Of course, these questions are just as important if you are handling property management yourself, and you may want to seek recommendations from other investors/landlords in the area.