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5 Tips Before Buying Your First Turnkey Rental Property

5 Tips Before Buying Your First Turnkey Rental Property

If you’re a passive real estate investor looking to purchase your first turnkey rental property, you might have a lot of questions before getting started. And that’s a good thing! The following tips will help you tackle the world of real estate investing head-on by minimizing mistakes, reducing risk, and preparing you for a future of financial freedom.

1. Outline Goals for Your Turnkey Rental Property

Goal setting and planning are integral parts of successfully investing in real estate.  After all, real estate investing is a business that’s varied and, at times, unpredictable. The sheer number of decisions can become downright paralyzing…unless you have a plan and goals set in place!

The best way to outline your investing goals is to ask yourself plenty of questions. For instance, once you acquire your first property, what will your next steps be? What are you working towards? Do you have your eye on other markets? Do you want to stay in the same market? How many properties do you want to acquire this year? What are your fiscal ambitions for the year? How about for the next five? Long-term?

Brainstorm and write everything down. If you don’t know how realistic your goals are or where to start, your turnkey provider is an excellent resource and can help you if you have questions.

2. Investigate Markets of Interest

Now more than ever, markets across the nation are diversified. They’re rising and falling, growing at different paces, and poised for exponential growth as well as investment opportunity. For investors, it’s crucial to research your markets of interest and consider where they’ve been and where they might be headed.

This is something you must do before buying in any market, but it’s especially important before your first purchase. Starting off on the right foot is critical for investing, and because each rental property creates leverage for the next purchase, early success means greater, long-term portfolio growth.

3. Set Up Avenues for Your New Real Estate Business

Being any type of real estate investor means you’re running a business. Many investors choose to set up an LLC to accompany their new investments as a means to limit their liability and separate their finances, while others just open a separate business bank account. Regardless, it’s helpful to ensure that you have an organized system in place for managing your investments and newfound streams of revenue. Here are a few options to consider:

  • Bank accounts
  • Physical and digital filing systems for tax purposes
  • Phone systems and voicemail
  • P.O. boxes
  • Dedicated email accounts

Some of these things might seem unnecessary, but it’s better to have them in the beginning than to  have to untangle your real estate investment business from your personal life down the line!

4. Develop an Investor’s Routine

Even the most passive of real estate investors have to dedicate and schedule time for their investments.

What exactly does an investor’s routine look like? It can be reading up on new strategies and economics, connecting with other investors, researching new markets, or anything outside of the regular updates you receive from your turnkey partner.

Memphis Invest offers numerous whitepapers, blog articles, videos and podcasts – free resources for investors wanting to know more about real estate investing. Using these tools routinely will keep you informed and help you grow more savvy in the business.

5. Communicate with Your Turnkey Partner

As the investor, you know your financial goals and your turnkey partner wants to support you in your vision. At Memphis Invest, it’s our goal to invest in our clients—we want to see them succeed, and we achieve that not only through excellent services, experience, and quality properties in great markets but through the meaningful relationships we form.

Ultimately, passive investors are putting their investments in the hands of their turnkey providers and property managers. Communicating their goals, desires, and needs at the beginning of their business relationship is paramount to success.

After you’ve laid out your vision and set up the framework for successful real estate investing, your turnkey provider can work with you to move forward with a great career as an investor.

Chris Clothier, author of The Turnkey Revolution, manages the development and implementation of sales and marketing for Memphis Invest. He helps potential investors define their purpose for investing in real estate and educates peer companies on best practices in the emerging turnkey real estate industry. He is a contributing columnist for BiggerPockets and an experienced speaker who regularly addresses audiences of real estate investors and business professionals.

 

Chris Clothier manages the development and implementation of sales and marketing for Memphis Invest. He helps potential investors define their purpose for investing in real estate and educates peer companies on best practices in the emerging turnkey real estate industry. He is a contributing columnist for BiggerPockets and an experienced speaker who regularly addresses audiences of real estate investors and business professionals.


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