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Purchasing Your First Rental Property? Here’s What You Should Know

New homeowners admiring their first property purchaseBuying your first Henrico County single-family rental property can be an exciting experience. But as with numerous investments, there are specific risks involved. To ensure that your first investment property purchase in Henrico County becomes as lucrative as you hope it will be, there are many things to know before purchasing. For example, you’ll need the answers to questions like whom do you want to rent to? What type of rental property will you focus on? How will you finance your purchase? In what follows, we explore these questions and other vital things you’ll need to know to make buying your first rental property a rewarding experience.

Define Your End Goal

One of the first considerations to keep in mind when buying your first single-family rental home is to set clearly defined end goals. Before you begin your property search, you need to identify what qualities you are searching for in your investment property. Let’s say you might be seeking properties in a particular area with a specific number of bedrooms or minimum square footage. You can even target a specific renter demographic, such as college students or retirees. Recognizing the details helps you to refine your search criteria and locate potential properties quickly.

Prepare Your Finances

Aside from learning what qualities you are searching for in a property, it is imperative to prepare financially before you acquire an investment property. Industry experts recommend paying down personal debt and saving for a down payment before initiating your property search. Reduced personal debt can help you to qualify for more favorable loan rates, while nearly all mortgage loans for an investment property will require a 20% down payment. Assembling to finance in advance is one more essential step, but look out for high-interest loans or mortgage products that seem too good to be true. By prequalifying with a trustworthy mortgage lender, you will be ready to seize investment opportunities as they occur. By prioritizing financial readiness, you can more assuredly acquire that rental property at the proper time.

Crunch the Numbers

After taking these vital preliminary steps, the search for the ideal property starts. One critical aspect to remember during your search is that you need to run a series of numbers on every possible property, such as your margins, operating expenses, and expected return. This is where a lot of new investors make costly blunders.

New investors have to bear in mind to include all the expenses related to purchasing and preparing the rental property for lease, as well as ongoing property management, maintenance, and vacancy costs. Industry experts suggest a margin of 10% and a 6% return in your first year means you have a profitable investment.

Stay Objective

It is essential to keep in mind that an investment property is just that, an investment. Getting attached to a certain property or permitting emotions to influence your choices is not a smart idea. Additionally, the property you buy is not necessarily one you would ever live in yourself. Industry experts suggest picking low-cost properties in high-demand areas for your first investment. However, avoid fixer-uppers unless you are a highly skilled home remodeling expert or know an experienced contractor capable of performing the work for less than the going rate. Your first single-family rental property should be considered the first step toward a long and profitable investment career rather than the end goal. In this fashion, you can keep yourself on track and your investment properties in the black.

Design a Management Strategy

Lastly, take into account that acquiring a rental property is just the first step. To guarantee that your investment succeeds, you need a proactive management strategy. This is where employing a Henrico County property management company can assist. As local market experts, property managers can help you discover off-market investment properties, analyze market conditions, set rental rates, and among other tasks. As more professional investors will teach you, the right property management company is a vital partner in profitable rental property investing.


If you’ve discovered your best investment property, make sure you also locate the proper Henrico County property management team. Contact Real Property Management Richmond Metro at 804-417-7005 now.


Originally Published on March 13, 2020

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