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Steps to Buying and Running Your First Rental Property to Success

There’s an obvious reason why it’s called “investment property,” and it has plenty to do with how it can be a lucrative way to invest your money. It’s a simple enough premise — you buy a property with the objective of making money out of it, either as a long-term or short-term rental. It’s an investment that will not only pay for itself in time but may even come with great profit potential, making it a truly compelling and shrewd financial move.

Of course, there’s still a considerable measure of hard work required to achieve exactly this. The important thing is, when it comes to an investment property, you’ll definitely want to do it right from start to finish, so you ultimately reap the payoffs that were promised. Let’s take a look at the most important steps you’ll need to take.

Zero in on the Right Location

Most real estate professionals can be downright obsessive about one very important factor in the property buying process, and that is location. For many, this can, in fact, make or break the sale of a property — or apropos to investment properties, be the biggest determinant in just how well it does as a rental. This is because renters will almost always err on the side of convenience, so they’re bound to go for a rental that’s close to schools, public transportation, establishments like restaurants, and more.

Case in point, in Kansas City, you can’t go wrong with the Overland Park and Leawood areas, which are not only within excellent school districts but also have great outdoor spaces, which inevitably make them more compelling neighborhoods for families. For the younger and hipper set, however, Brookside and River Market will undoubtedly be more ideal with their bevies of trendy establishments and proximity to tech startups.

It goes without saying that it will serve you well, indeed, to really put a premium on location when you buy your investment property. At the same time, you’ll also want to determine the kind of rental property you want to run and the tenants you want in the house.

Hit the Ground Running with Improvements

Assuming you’ve already acquired your property and already have a better idea of the kind of rental that you want to put out there, you can now work on improving it accordingly. If you’re lucky, you may end up with a property that will require little more than surface improvements, so you can focus on achieving the aesthetics that you had in mind and adding in features that will make it more compelling as a rental.

In some cases, more work may be required to get your property rental-ready. For instance, a property that has poor air quality is definitely not something that you want to rent out just yet as this can cause respiratory problems and other health issues, which you certainly don’t want your tenants or guests to acquire. In this situation, you’ll want this problem addressed by getting a central air cleaner installed to remove pollutants and allergens and keep indoor air clean, which will set you back between $506 and $3,660.

Don’t Go It Alone for Maximum Profit

Finally, know that the work is nowhere near done, even when the property is ready to rent. You will still need to get the word out on the property, which will entail listing it in the right places and even marketing it heavily, especially if it’s located in a competitive area. Moreover, you’ll have to vet tenants, manage maintenance, arrange cleaning (for short-term rentals), stay on top of utilities, do the books, and so much more.

It’s a lot of work, yes, but it’s work that can be delegated to property management pros who know all the ins and outs of running successful rental properties. No doubt, this is a really feasible option if you want to take no chances and/or you simply don’t have the bandwidth to manage the property yourself.

Ultimately, the success of your investment hinges heavily on the decisions you make, as well as the steps you take to support those decisions. And with the ROI potential being as substantial as it is, you definitely won’t lack for motivation.

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