Rental Property Investing: Complete Beginner’s Guide on How to Create Wealth, Passive Income and Financial Freedom with Apartments and Multifamily Real Estate Investing Even with No Money Down
By James Connor
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About this ebook
If you want to increase your wealth through investing in property but have absolutely no clue where to start, then keep reading …
Have you ever thought about the huge potential to create wealth through investing in rental properties?
Thinking about it and doing it are two different things.
You want to invest, but you have no idea where to start?
Before you can make a down payment, there is important information that you've got to know.
For example, do you know where the best place to find a rental property to invest in is? Do you browse the web or do you go to an auction?
And should you look for a property that is in your neighborhood, or should you be searching for an investment in a beachfront property?
There are countless questions you need to ask and know the answers to before you can start investing.
It isn't as simple as going to the store to buy a loaf of bread. If investing in real estate was that easy, then everyone would be doing it.
The first key to unlocking the door to your investment dreams is to create a detailed business plan. You need to understand the secrets to analyze the market so that you land a profitable property.
With a clear strategy that has been created by real estate experts, you can get yourself on the property ladder, and start making direct income through rent.
Buying the property is only the first step.
You have to find tenants and as any successful investor will tell you, you have to retain these tenants.
But do you have any idea what the best methods are for retaining tenants? And how do you deal with difficult tenants?
There are numerous options for managing your properties and once you understand the pros and cons of each different management strategy, then you can make a sound choice and start thinking about adding to your property portfolio.
In this book, "Rental Property Investing", you will discover:
- The 5 easy steps to create a successful business plan
- The tax benefits that property investors are entitled to and how to claim them
- The 5 principles to succeed as a property investor
- The different sources for finding a property and the best one for you
- How to see the big picture when analyzing potential properties to add to your portfolio
- How to buy a $0 house
- A simple explanation of how to calculate your future expenses
- The criteria that you have to use when selecting the right location to invest in
- The 3 types of rental management strategies and how to choose the best one for you
- How to create an exit strategy and the best time to do it
- The 5 stages of finding a tenant
And much, much more.
There are two traps that most people fall into when they think about property investment.
The first is that you have to be rich to do it.
The second is that it is so difficult that only very few clever people can become a property investor.
Neither of these things is true. There are millions of ordinary people with property portfolios around the world.
You can become one of them without studying for years.
If you want to discover the secrets to successful rental property investing, then you need this book today!
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Rental Property Investing - James Connor
Rental Property Investing
Complete Beginner’s Guide on How to Create Wealth, Passive Income and Financial Freedom with Apartments and Multifamily Real Estate Investing
––––––––
James Connor
© Copyright 2019 - All rights reserved.
The content contained within this book may not be reproduced, duplicated or transmitted without direct written permission from the author or the publisher.
Under no circumstances will any blame or legal responsibility be held against the publisher, or author, for any damages, reparation, or monetary loss due to the information contained within this book. Either directly or indirectly.
Legal Notice:
This book is copyright protected. This book is only for personal use. You cannot amend, distribute, sell, use, quote or paraphrase any part, or the content within this book, without the consent of the author or publisher.
Disclaimer Notice:
Please note the information contained within this document is for educational and entertainment purposes only. All effort has been executed to present accurate, up to date, and reliable, complete information. No warranties of any kind are declared or implied. Readers acknowledge that the author is not engaging in the rendering of legal, financial, medical or professional advice. The content within this book has been derived from various sources. Please consult a licensed professional before attempting any techniques outlined in this book.
By reading this document, the reader agrees that under no circumstances is the author responsible for any losses, direct or indirect, which are incurred as a result of the use of information contained within this document, including, but not limited to, — errors, omissions, or inaccuracies.
Table of Contents
Introduction
Chapter 1: Rental Property 101
Pros and Cons of Rental Property Investing
Direct income
Appreciation of the property
Sweat equity
Tax benefits
Identify Your Investment Goals
Principles of Success
Learn to manage efficiently
Increasing your income
Reduce the expenses
The property matters
Tenants
Investing Strategies
Type of Investment
Single-family units
Multi-residential units
Real Estate Investment Team
Real estate agents
Property manager
Chapter 2: Sample Plans
Develop a Business Plan
Step one: Setting your passive income goals
Step two: Selecting your market
Step three: Estimating all your expenses and the sources of finance
Step four: Marketing strategies
Step five: Managing the rental property
Chapter 3: How to Find Rental Properties
Different Sources to Consider
Through your network
Find properties online
Realtors can be helpful
Don’t overlook the print media
Auctions
Steps for Choosing an Investment Property
Appreciation of the rental property
Return rate
Calculate the capitalization rate
1% Rule
Chapter 4: Analyzing a Rental Property
The Big Picture
Income matters
Price appreciation
Property price and inflation
Property is localized
Specific Steps to Follow
Calculate the annual gross yield
Compare the gross rental yield to the risk-free rate
Calculate the annual net rent yield
Compare the net rental yield to the risk-free rate
Price to earnings ratio
Property price and rental expectations forecast
Various situations
Taxes and depreciation
Cash Flow Analysis
Total income
Total expenses
Cash on Cash Return on Investment
Cash Flow using the 50% rule
Chapter 5: Location of The Property
Big-picture Location Criteria
Jobs and economics
Population growth
Price-rent ratio
Small-scale Location Criteria
Convenience
Romance
Crime rates and safety
School districts
Public transport
Neighborhood covenants
Local laws
Barriers to supply
Chapter 6: Rental Property Management Strategies
Types of Management Strategies
Do-It-Yourself Approach
Half and Half Approach
Outsourcing Everything
Steps of Self-Management
The correct rent
Automate the process
Learn the landlord-tenant laws
Diligent screening
Legal agreement
Property maintenance
Performing regular inspections
Insurance is a must
Tax time
Network
Chapter 7: Financing Options
House Hacking
Seller Financing
Assuming the Seller’s Mortgage
Negotiating a Second Mortgage
Collateral-Based Lending
Partners
Credit Cards
HELOCs
Other Options
Saving your tax returns
Set aside part of your payroll for investment
Living modestly
Additional sources of income
Chapter 8: Exit Strategies
Types of Exit Strategies
Sell
Own outright
Refinancing
HELOC
Staying put
Chapter 9: Stages of a Screening Process
First Contact
When to start screening?
Questions to include
Show the Property
Tips to follow
Red flags to watch out for
Rental Applications
Accept and Reject
Credit report
Sign the Rental Agreement
Reviewing the rental agreement
Security deposit, first month’s rent, and the move-in fees
Setting a deadline
Chapter 10: Increase Tenant Retention Rate
Understand the Market
List of Improvements
Referral Program
Screening is Important
Maintain Reference Files
Raise the Rent
Pick up the Phone and Call
Don’t Barge into the Property
Prioritize the Responsiveness
Sending Holiday Cards
Pruning is a Must
Chapter 11: Mistakes to Avoid
Mistakes to Avoid while Buying a Rental Property
Concentrating only on appreciation
A watertight contract
Hiring a third-party
Lack of proper insurance
Too many properties
Common Mistakes Rental Property Owners Make
Don’t try to do everything by yourself
Only a specific service provider
Hiring a real estate agent
Charging the wrong rent
Improper insurance
Clear rules
Unhealthy relationships
Repairs and maintenance
Legal Mistakes to Avoid
Discriminating queries
Failure to disclose
Illegal elements in the rental deed
Provide a safe environment
Refusing to make repairs
Violating the tenant’s right to privacy
Eviction rules
Withholding the security deposits
Deal with abandoned property
Inadequate insurance
Conclusion
Reference
Introduction
Are you interested in increasing your wealth by investing in rental properties, but you aren’t certain where to begin? Do you think that rental property investing is a good idea for you? Do you want to invest without having to worry about any expensive mortgages or down payments? If yes, then this is the perfect book for you. This book is a beginner’s guide to learning about rental property investing. If you are a first-time investor, then I am quite certain that you have plenty of questions. Well, in today’s tech-dominated world, a simple Google search can provide you with plenty of information. However, the wealth of information available online can be quite scary, especially for a beginner. That’s where this book comes in. Don’t worry, because this book will become your go-to guide to learning about rental property investing.
In this book, you will learn everything there is to know about rental property investing. You will learn if rental property investing is a good option for you, the steps to buying your first property, different things you must consider while buying a rental property, how to analyze the property, raising funds to buy your first rental property, how to manage the property, and much more. Rental property investing is a great way to generate additional income or even passive income. Regardless of your reason for investing, you must understand all the different aspects involved in investing if you want to be profitable.
So, if you are ready to step into the world of rental property investing, let us get started without further ado!
Chapter 1: Rental Property 101
Rental property investing is a great idea - however, how can you determine whether it is the right idea for you or not? As with any other form of investment, there are certain pros and cons involved in rental properties. To begin with, let’s talk about the benefits and the possible drawbacks of rental property investing.
Pros and Cons of Rental Property Investing
Direct income
The most obvious benefit of investing in rental properties is that you will be receiving income from your renters. It is a direct source of income. The monthly checks you receive will go directly to your monthly income. For instance, if you decide to rent a property for about $1000 a month, that’s $12,000 in the form of additional income per year. Even if this number sounds rather optimistic to you, you stand to gain at least 75% of this from rents. It certainly is a good source of additional income. Apart from this, it is a great source of passive income. Once you rent your property, you don’t have to do anything other than collect rents and ensure the property is well maintained. You don’t have to quit your day job to become a rental property investor. If you want to, you can always hire a property manager to take care of the property. By doing this, you can drastically reduce the efforts involved in managing the property and can collect your rent checks with no hassle on your end.
Appreciation of the property
Since you happen to own the property, you will stand to gain when the property’s value appreciates. Over time, the value of the property does appreciate. So, if you do want to sell in the future, you can expect a profit from the sale.
Sweat equity
Whenever you upgrade the property or make any improvements to it, it increases the sweat equity of the property. If you repaint, get some landscaping done or refurbish it, the property’s value will increase. Whenever the value of the property increases, the rent you can demand for the property increases, too. All of this means that it will increase your income.
Tax benefits
There are a couple of tax deductions you can claim as a property owner. All the deductions will help reduce your taxes and increase your earnings. For instance, one of the most considerable deductions available to the owner of a rental property is the interest paid toward the mortgage or any other loan. Any interest payable on a loan that is taken to acquire or improve the property is a deductible expense. The deduction of real estate depreciation is another