If you’ve done your research and you’re ready to invest in a Southwest Michigan rental property, it’s time to hit the ground running. Go out and buy that property!
But, where? And how?
Today, we’re sharing some tips on how to find your first investment property and what you should be looking for when you’re ready to buy.
Put Together a Checklist
The Southwest Michigan market has a lot of investment opportunities. But, you don’t want to grab the first property that comes into your orbit. Be intentional. Put together a list of the things you need to make a smart investment decision. As a new investor, we recommend a few specific requirements. First, make sure the home is in good condition. Lots of real estate investors specialize in buying distressed properties and fixing them up for the rental market. That may be part of your investment strategy in the future, but on your first property, find one that’s already in good condition.
There’s other criteria that a good first investment property will meet. Check out the neighborhood. Make sure it’s desirable to tenants and close to schools, shopping, and commuter routes. The size is also important. If you’re looking for a single-family home, you’ll have other considerations like yard space and the number of bedrooms and bathrooms. If you’re looking for multi-family properties, have an idea of how many units you’d like. Evaluate how many of them are occupied. Choose a property that fits your investment goals.
Do the Math
It’s also important to make sure the numbers add up when you’re looking for your first investment purchase. Evaluate the cap rate and look at the cash flow projections. Calculate how much rent you expect to earn and look at what the vacancy and turnover rates are. Before you begin looking for properties, you should know how much cash you’re willing to put down and how much you want to leverage.
Searching for Investment Opportunities
Once you have a good criteria in place, it’s time to go shopping. Networking can help. Let people in your circle know that you’re looking for real estate investments. Word of mouth is a powerful tool in the local real estate industry. If there are local real estate clubs or investment associations, join them. Check the Multiple Listing Service (MLS) as well as Craigslist and other sales sites. Develop relationships with real estate agents, brokers, and property managers. These professionals work with properties every day, and they know where to find good deals and how to measure the potential of an investment.
Buying your first investment property can be an exhilarating but also an anxious time. You want to do everything right, and you want to be successful enough with your first property that you can start thinking about building a portfolio.
We work with investors at all levels, and we’d be happy to give you some advice about where you can find the best investment opportunities. We understand the local market and we work in all of the neighborhoods around Berrien County. Contact us at Real Property Management Southwest Michigan.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
