This course outlines a very specific real estate investing strategy. That strategy is one that is primarily focused on being as passive and low risk as possible. There are a million ways to successfully invest in rental properties - there isn’t enough time in the year to outline them all. We’re also not experts in every strategy.
In this course you’ll learn exactly how I invest in rental properties, the things I think about and why I make those decisions. This is primarily a buy and hold strategy focused on the long term.
These are the attributes that I consider necessary in the investment of a “Great” Rental Property
Monthly tenants require less work. AirBNBs may be more profitable, but they are far more work and risk.
**There’s an excellent data-focused app called AirDNA that I purchased when we were doing research for our AirBNB episode with Ziona. One thing I found very interesting was that all of the most profitable places were also the most cyclical. They were mostly vacation places with clear seasons or college towns when parents came to visit the campus**
Show the numbers of a basic Atlanta Rental Property vs AirDNA in a very profitable but cyclical area.
Positive Cash Flow
The property price is relative. A higher-priced property simply needs a higher monthly renter to justify the cost. It’s the ratio between these two numbers that we focus on.
Our goal is something with a substantial enough return for taking the risk to make sense. Having a clear minimum profitability requirement is important. For us,
Stable and Growing Metro Area Nearby
This plays very much into consistency. An area with great and growing job prospects means your tenants are more likely to stay employed.
An Amazing Property Management Team
Our goal is to invest, not to be actively involved. We can do this by having a killer team that does all the work and just asks us for direction.
An example would be renovations of the property. We can decide what we want to do and ask them their opinion. This way we can decide on our own the best step forward. The Property Management Company will give us contractors and quotes, we just pick the best one and it’s handled from there.
Not Getting Involved
It will almost always make more sense for us to not do this work ourselves for a few reasons:
- In order to afford this property, it’s not likely to be where we live. In most cases, our properties will be a fraction of the cost of where we live. The more properties we have, the lower the overall risk of our property portfolio is. Diversification is always key.
- Prices will often be very cheap as great Property Management companies already have great relationships with contractors. You personally will not be able to compete with the experience and value of these contractors.
- In order to scale your rental property investments, your time can’t be constricted. If it is, there is a maximum amount of properties you can own before you are overwhelmed. This includes being anything more than a passive or long-distance owner would.
Please Leave a Comment
- If you have questions or confused by anything in this lesson, please leave a comment.
- We will answer comments and use them to improve both the text and the videos in this course.