Tips to Buy Your Very First Rental Property in Louisville

Are you thinking about buying your first rental property? Maybe you want to invest, and you have come to the conclusion that real estate is the best option. Either way, there are a few things that you can do to make sure your investment is a profitable one.

Photo of three people having a difficult discussion.
There are many factors that go into buying an investment property that is very different than buying a home for your family.

Are You Cut Out to Be a Landlord?

Do you feel as though you know your way around a toolbox? Maybe you are good at repairing drywall or even unclogging a toilet. If this is the case then you will be able to do a lot of the work on your property yourself.

This is fantastic, but if you don’t know your way around a property then you may need to try and hire someone to do the work for you. This will, of course, eat into your profits. If you want to help yourself here, then it’s wise for you to find someone who can help at a reasonable price before you make your investment. This will help you to make the most out of your investment and it will also work wonders for your profits overall.

Pay Down Your Personal Debt

Savvy investors may well carry debt as part of their strategy and this is fine, but if you want to make sure that you have the highest chance of success then you may want to avoid it if you can.

After all, you may find that, over time, you end up accumulating student loans, medical bills, or even other debt. The key to experiencing success with your property is having patience. You might not need to pay down the debt that you have right now if the profit your investment brings in is higher than the debt you have.

Secure Down Payments

Investment properties tend to require a much bigger down payment when compared to one that is occupied by the owner. They will have more stringent approval requirements and you may even find that you need to take out a bigger insurance policy too. All of this will of course add up so you need to make sure that you can accommodate this cost. Condo insurance is very easy to come by as well, so keep that in mind.

Find a Suitable Location

The last thing that you want is to be stuck with a property in an area that you fear is declining. You may be able to secure a lower price but at the end of the day, you have to make sure that you do everything you can to try and take advantage of the investment as a whole.

When looking to buy your first rental property, you need to try and look for a location that has relatively low property taxes along with a decent school district. If you do then you will soon find that you are able to get the best result out of your purchase and that you are also able to make everyone feel safe whenever they rent from you.

When targeting the best locations in Louisville for rental properties, consider the following:

Certain areas around UofL are great because college kids love to rent homes but beware of the greater risk for property damage. Also, Norton Commons is very attractive to young professionals and rents can be quite high for you here.

Why Louisville is Favorable when Compared to Other US Cities

The demand for rental housing in Louisville has been increasing ever since the housing crash of 2009. There are many reasons why people want to live in this area, and a lot of it comes down to millennials. They want to live closer to work and they also want to be nearer to the bar and restaurant scene.

Millennials are also notorious for preferring the lesser commitment involved with renting properties, which makes real estate investment a prime choice. Louisville is booming with new business, which is creating more jobs and therefore rocketing the potential of the area in general too, another point to take into consideration.

Look at Loan Rates

If you know that you are going to have to take out a loan for your rental home or commercial property then it is very wise for you to look at loan rates. When you do, you will be able to find out which properties are affordable and which ones aren’t.

Remember that just because some banks have a lower rate than others, doesn’t mean that they are the best choice. For example, some lenders will give you better rates if you take out a very large loan and others will give you better rates for a small loan. If you take all of this into account, then you will soon find that it is easier than ever for you to save money and time.

Building a Good Louisville Portfolio

There are many ways that you can build a good portfolio in Louisville. First of all, you need to try and make sure that you have a good selection of properties. Having family homes, condos, and even apartments are always good, as it safeguards you against any future changes.

With Louisville being such a diverse area, it’s safe to say you won’t have a problem with finding properties that meet your requirements. For your first rental property, you’ll want to start with a smaller price point just to get some experience as to how the process works.

Consider a Property Manager

There are times when it makes sense to hire a property manager. When you do, you can then count on them to work with you to make sure that all of your properties are in top-notch condition and that you are also able to answer any tenant phone calls with ease.

If you are not quite sure how a property manager could help you then it’s wise to contact your local one so that they can work with you from the get-go and give you all the help you need. If you need some guidance with your property then remember that there are so many people out there who can give you some advice, including landlords in your local area.

Tre Pryor, Realtor

Tre Pryor is the leading real estate expert in the city of Louisville. He is a multi-million dollar producer and consistently ranks in the top 1% of Louisville Realtors for homes sold. Tre Pryor has the highest possible rating—5.0 stars on Google—by his clients and is routinely interviewed by the local NBC news. Tre Pryor is a member of the RE/MAX Hall of Fame.