4 Things To Look Out For In Your First Rental Property

Have you ever thought about buying a rental property? Maybe the thought of owning a tangible asset and making monthly income is REALLY appealing to you and seems like you could make easy money. Although it is super simple (by no means easy), I want to make sure you are prepared to buy your first investment property and don't mess up like I did - yeah, I wasn't prepared. I want to help you save money in the long run and not have to spend THOUSANDS of dollars out of your own pocket if you don't have to.

Here are 4 things you should keep in mind before buying your first rental property:

1. How old is the roof? There are several major costs that come with owning a home and replacing the roof is one of them. The average roof replacement could cost you anywhere between $6,000 - $12,000 (depending on the size of your house). Roofs usually last 15-20 years here in Kentucky, so if you are looking at a property and the roof is older, just plan to put it in your budget to either fix now or fix down the road. The older the roof gets, there are more chances of leaking and causing other issues in your house. Oh! And insurance companies will sometimes give you better rates if you have a new roof - that's a plus! Let's just say that I learned all of this the hard way.

2. How old is the HVAC? When it comes to the HVAC (heating and cooling), it is very similar to the roof. Although the cost to replace HVAC units are a little cheaper than replacing a roof, they can still be costly and eat into your profit. Before you buy your first rental property, make sure you know the age of the HVAC. Heating and cooling is a basic requirement for your tenants and the last thing you want is a unit going out on them in the mid-summer. You will have unhappy tenants! So, make sure you also put HVAC updates in your budget before purchasing the home.

3. How old are the windows? To me, updated windows are just as important, especially if you are paying for your tenant's utilities. Having updated windows could save you hundreds in your electric bill AND could raise the value of your property. So, if you plan on selling the property in the future or planning to use a Home Equity Line of Credit to get some cash back, updating the windows is important. Before purchasing the property, make sure you know how many windows there are and how much it would cost to replace them (if needed). Older windows such as wooden and aluminum windows can be replaced easily and can help you in the long run.

4. How is the foundation? The most important factor to me is the foundation. If a house has a bad foundation, it could kill an entire deal. It could cost you thousands of dollars just to fix the house from falling down. Before I look purchase a property, I check to see if there are any cracks in the foundation or if the house is leaning at all. If you stand at the front of the house and see that its leaning to one side, you more than likely have a foundation issue. Have a local home inspector or contractor come out and see what's up with the "bones" of the house.

There are several other factors that come into play when evaluating a rental property (financials, neighborhood, etc.), but these are 4 things that can be a major cost and could set you back if you are not prepared. Either plan on adding these cost into your loan at the time of purchase or budget to replace these down the road.

Expect the unexpected so you aren't set back and "burn't" by this real estate game. If some of these factors don't line up and look iffy, opt out and find another property. There are thousands of investment properties around you and it may just take patience to find the right one.

If you have any other questions about buying an investment property, I would love to share some of my knowledge and experiences with you. Feel free to reach out to me on Instagram or Facebook and I would love to chat with you! Have a great day and God bless!