Real estate investing takes many different forms. One of the most popular, however, is rental property investing.
Rental property investing is an amazing way to earn passive income and maximize your return. However, it is not easily done.
Investing in rental property can be risky as a beginner and millions of things can go wrong if you do not know how to properly manage your investment.
Being a great rental property investor takes many trials and tribulations, and you will face numerous challenges, but it is important to take them as learning opportunities and continue to grow.
In this article, we have gathered ten successful rental property investors and asked them what it takes to succeed in the world of rental property investment, so stick around to learn all about it!
What does it take to be a great rental property investor?
Do you want to learn how to become a great rental property investor? See what these experts have to say below.
1. “Know the market”- Rinal Patel- Founder of Suburbrealtor
Bio: Rinal Patel is a real estate agent and the founder of Suburbrealtor.
“To be a great rental property investor, you must have knowledge of the real estate market,” says Rinal.
As an investor, you will face tons of market fluctuations, trends, and many other challenges. So it is important to keep up with these changes and always understand the market.
She also adds that you must be financially savvy, as “rental property investing requires a significant amount of capital.” This includes having a proficient understanding of financing options, such as mortgages and loans.
2. “Know how to spot a good deal”- Daniel Johnson- Texas real estate agent and finance expert
Bio: Danel Johnson is a Texas real estate agent with a Bachelor's Degree in Financial Economics and 10 years of experience helping investors make the best decisions.
“Being able to spot a good deal when no one else does is a great way to not only make a good profit but also provide good standing to other investors as well,” explains Daniel.
“Taking an abandoned or run-down home in a great neighborhood and fixing it up to rent out [..] improves the neighborhood,” says Daniel. It also allows you to truly maximize your investment, ensuring your success as an investor.
3. “Understand investment itself”- Harry Gallagher- CFO of Life Part 2
Bio: Harry Gallagher is the CFO of Life Part 2.
Harry poses great questions to ask yourself as an investor, which are a great part of understanding the investment process itself.
He suggests asking yourself the following questions:
- What are the costs associated with owning and managing the property?
- What are the potential risks and rewards?
- How much can you afford to lose if things go wrong?
These questions should help you get a good idea on the overall investment, and will potentially even tell you if it’s truly worth it.
In addition to understating your investment, Harry also suggests being a good manager, “this includes things like being able to keep track of your expenses and income, being able to attract and retain good tenants, and being able to handle any problems that may arise.”
4. “Master risk assessments and trend forecasting”- Cam Dowski- Founder of WeBuyHousesChicago.co
Bio: Cam Dowski is a real estate guru, and founder of WeBuyHousesChicago.co.
“Mastering risk assessment and trend forecasting are the two necessary elements to be a great rental property investor,” says Cam.
Investing in rental properties has many associated risks related to tenancy and legal issues. Creating a solution of your own in these situations is the last thing you want to do. Sometimes, doing everything yourself can be a liability.
“The ability to forecast trends in real estate, especially in rental properties is a must-have to be a great rental property investor,” also explains Cam. He states that “this is because it is a highly volatile market and has unexpected fluctuations that if not anticipated timely can turn opportunities into losses.”
5. “Develop the skills needed”- Gary Parker- Founder of GaryBuysHouses
Bio: Gary Parker is the founder of GaryBuysHouses and a licensed Realtor in the state of Utah, USA.
A great rental property investor, according to Gary, "is one who has the knowledge and skill set necessary to make a successful investment.”
Here are the 4 skills deemed important by Gary:
- Patience - It takes time and effort to identify good rental properties, vet them for potential investments, and then manage them through the ups and downs of the rental market.
- Preparation - A successful rental property investor is always well-prepared with research material, financial statements, and scouting reports on properties in their target area.
- Tenacity - Successful rental property investors never give up on a property until it's sold or they've exhausted all other options.
- Strategy - A great rental property investor knows how to find trends in the market and use that information to their advantage.
6. “Business is business”- Brian Davis- Founder at SparkRental.com
Bio: Brian Davis is an income investor and founder at SparkRental.com.
“You need to approach your rental business as, well, a business,” says Brian.
“If a contractor or property manager fails to deliver, fire them rather than letting them continue to cause problems. If a tenant fails to pay rent, start the eviction process, as it takes months to complete in most markets.”
Brian recommends that you set high expectations early with everyone you work with, and enforce those expectations. Always focus on a job well done so that your business can flourish.
7. “Understand the tax implications of rental property investing”- Andrew Lokenauth- Landlord and real estate investor
Bio: Andrew Lokenauth is a landlord and real estate investor with 15 years of experience.
Among other tips like networking and marketing, Andrew says that having a strong understanding of the tax implications of rental property investing is an essential aspect of becoming a great rental property investor.
This includes knowing how to claim depreciation and other deductions on your taxes, as well as understanding how to structure your ownership to minimize your tax liability.
8. “Strong financial and legal knowledge”- Nicholas Stockton- Marketing director at Search Party Property
Bio: Nicholas Stockton is the Marketing Director at Search Party Property and has over 20 years of experience in the real estate industry.
“To be a great rental property investor, you must have a wide range of abilities and attributes that allow you to make informed judgments and optimize your returns,” says Nicholas.
Strong financial and legal knowledge will give you the “capacity to properly analyze investment opportunities, and the competence to manage and maintain rental properties,” explains Nicholas.
9. “Build a trusted team of professionals”- Matthew Slowik - Owner Revival Homebuyers
Bio: Matthew Slowik is the owner of Revival Homebuyers and has been a real estate investor since 2008.
“Build a team of professionals to help with property management and legal concerns,” explains Matthew.
Regardless of your property count, source a useful and trusted team. “While it’s good to have someone on standby, contractors like to work with those they’ve developed a relationship with, this will be your savior in the event of an emergency call,” says Matthew.
If you do not want to deal with this, however, Matthew suggests hiring a property management company. Always remember that you need to be present in the process.
10. “Learn how to delegate”- Tomas Satas - Founder and CEO at Windy City HomeBuyer
Bio: Tomas Satas is the founder and CEO of Windy City HomeBuyer.
“To be a great landlord, you have to learn how to delegate,” suggests Tomas.
“When I started, I was taking care of everything myself. But once I bought my first multifamily, I had to learn to let a property manager and maintenance person take care of the place. After learning many important lessons from the first year of managing them, I began purchasing more properties and hiring more employees to help shoulder the responsibilities.”
In conclusion, being a rental property investor can be a difficult and overwhelming endeavor, but DoorLoop is always here to help you every step of the way.
Ready for more reading?
DoorLoop has a massive treasure trove of free resources for investors and landlords looking to maximize their rental game.
Here are a few examples:
- Active vs. Passive Real Estate Investing: A Complete Guide
- Real Estate Investing: 15 Key Questions For Investors To Ask
- Real Estate Investing: The Pros And Cons Investors Should Know
Also, if you’re thinking about how property management software can maximize your investment… You’re on the right track.
Property management software can help you maintain control of your properties while streamlining the tedious processes.
With DoorLoop, you will experience:
- A robust set of features that offers everything you need to manage your properties
- Incredible ease-of-use
- Responsive customer service with real human beings
- Competitive pricing that can fit any budget
- … and much more.
With DoorLoop on your side, you can accomplish anything, so schedule a free demo today and see what it can do for you.