Getting Started Investing With Single Family Rentals

Getting Started Investing in Single-Family Homes

It is not uncommon for people to find the prospect of breaking into the real estate industry somewhat daunting. Whether you are looking to purchase your first home or investing in a property, buying a house can seem like a big deal. But if you know what you're doing—and you go about it in the right way—it can change your life for the better. Making a real estate investment, particularly in single-family rentals (SFRs), offers a range of advantages and incentives to first-time investors. The most apparent quality of assets of this nature that attracts individual investors is that they provide consistent, monthly cash flow. In addition to these short-term benefits, SFR properties also offer the potential for equity growth since the mortgage is paid down. They also provide the incentive for the appreciation of the property value over time.

Benefits

The best part about investing in this class of asset is that you don't have to completely re-design your life around it. You can start slowly without having to disrupt your everyday life while working to secure a more financially stable future for yourself. Of course, you will have to properly asses your finances before making such an investment and work out if or when you will be able to do so. You don't necessarily have to go out and buy a house to start renting, as this might not be feasible for you. If you can secure a loan with low-interest rates it will be much easier to get started. To do this, you will need to:

-        have a good credit score (740 or above)

-        have the funds to make a considerable down payment

-        turn to local banks for more flexibility

You may want to consider working this investment plan into your next move—on average, Americans move once every five years. So, instead of rushing out and trying to find a property to rent out, you can convert your current home into a rental property when you next move.

Advice & Guides

Check out Building Wealth One House at a Time by renowned real estate expert John W. Schaub for a practical guide to making your first real estate investment. Schaub reminds us that you don’t have to be a big-time real estate guru flipping hundreds of houses every year to be a real estate investor. You have to be decisive and make a full long-term plan for your investment goals. Work out precisely what type of returns you want to generate and fully detail your other criteria for a potential Investment.

Take a look at this guide from Forbes on How To Get Started With Single-Family Rental Investing for some advice on how to best break into the real estate investment business. And if you think single-family rentals are the right investment opportunity for you, do plenty of research, talk it over with people you trust, and get in touch with your local real estate market to find out what all of your options are.