How Do I Find My First Rental Property?

Buying investment properties might seem like a daunting task upon first consideration. After all, there are several variables that come into play when making a real estate investment and your lack of experience might leave you feeling unsure of how to proceed. But in reality, buying rental property is a fairly simple process once you get a basic idea of what to look for. In this article, we will show you how to find your first rental property in a few simple steps and outline some of the best practices that you need to adhere to when navigating the housing market.

The Complete Guide on How to Find Your First Rental Property

Investment property search is a critical part of real estate investing. In fact, being able to identify positive cash flow properties is what differentiates a successful investor from an unsuccessful one. With this in mind, beginners need to be especially careful and conservative when approaching the housing market. Here is a helpful guide to finding your first rental property.

1- Set your objectives

Before starting the process of finding your first investment property, you need to set clear objectives. Some of the parameters that you need to address include the maximum amount that you are willing to put towards a down payment, the type of real estate market you want to invest in, your optimal return on investment (ROI), and the rental strategy you are going to implement (Airbnb vs renting out traditionally). Setting objectives will help get your first rental property search on the right track and allow you to manage your real estate investments in a focused manner.

2- Identify a profitable real estate market

It goes without saying, identifying a profitable real estate market is a critical part of finding your first investment property. As you would expect, there is a myriad of variables that you need to take into consideration when looking for the best rental investment markets. But to keep things simple for you, here are the main factors that you should focus on:

• A low unemployment rate: This factor is crucial to the profitability of a housing market. An area with a healthy employment rate will invariably have a strong rental market as demand for housing is consistently strong.
• Population growth: A decent population growth rate is another indicator of a strong rental market. Generally speaking, a growing population bodes well for real estate investors as it ensures the long-term viability of their investment.
• Affordability: The ideal real estate market for your first rental property should be an affordable one. Unlike expensive areas, a market with affordable housing offers more opportunities for real estate investors and provides more wiggle room to experiment with different strategies.

3- Use specialized real estate investment tools

Savvy real estate investors know that the best way to find rental properties is to use high-end specialized tools. Relying on these solutions takes the human element out of the equation and ensures more accurate results. Fortunately, all the tools you need can be found right here on Mashvisor. Here is a brief overview of how you can use our real estate investment software to find your first rental property:

• Real Estate Heatmap: This great tool employs visual cues and neighborhood data and enables you to locate the top-performing areas on a map. Whether you are looking for your first Airbnb rental property or a long-term rental, this practical tool is a great way to narrow the scope of your search.

Mashvisor’s Real Estate Heatmap

• The Property Finder: This is one of the most powerful real estate investment tools on the market today. Thanks to a set of machine learning algorithms and cutting-edge AI technology, the property finder is able to sift through thousands of listings and find a high return investment rental property that matches your criteria.

Mashvisor’s Property Finder

• The Investment Property Calculator: The Mashvisor investment calculator helps you determine a wide range of property metrics that pertain to income and expenses. Thanks to this tool, you will be able to find a positive cash flow rental property in no time.

Mashvisor’s Investment Property Calculator

Start your 7-day free trial with Mashvisor and subscribe to our services with a 20% discount after.

Related: How Much Profit Should You Make on Your First Rental Property?

Exploring Other Ways of Finding a Rental Property

Although you will find the best rental property if you use online search tools, there are other strategies that a beginner real estate investor can implement when trying to find properties for sale.

• Retain the services of a real estate agent: Working with a real estate agent is another great way to find your first rental property. In fact, agents have access to a large database of listings and are well-positioned to identify an investment property that fits your requirements. Moreover, a real estate agent can help you avoid the common pitfalls that are associated with real estate investing. Examples of this include failing to explore all financing options, not accounting for expenses, and setting unrealistic goals.

Related: Working with a Real Estate Agent: What Investors Should Expect

• Drive around your area: When you are trying to figure out how to find rental properties, driving for dollars is an option worth considering. In fact, this strategy has proven to be particularly effective when it comes to unearthing undervalued real estate investments. The idea behind this approach is fairly simple. Drive around an area of your choosing and look for properties that appear to be distressed. Examples of some of the signs that you should look for are an overgrown front yard, broken windows, and peeling paint. After compiling a list of addresses, do a little bit of digging to see if any of these properties are on the market or for sale by owner (FSBO).

The Mistakes You Need to Avoid as a First-Time Real Estate Investor

Like we mentioned earlier, buying your first rental property requires avoiding a number of pitfalls. Here are the main ones you need to watch out for:

• Taking on a large mortgage that eats away at your cash flow
• Investing in expensive housing markets
• Not carrying out a home inspection
• Investing without enough cash reserves to cover unexpected expenses
• Not seeking professional assistance

Related: Top 5 Tips for First-Time Real Estate Investors

The Bottom Line

There is no reason to stress out when you are looking for your first rental property. In fact, the process can be quite enjoyable if you approach it with the right attitude. Applying some of the tips discussed in this article should get you started on the right path.

To start looking for and analyzing the best rental investment properties in your city and neighborhood of choice, click here.