What to Ask Yourself Before You Buy Your First Rental Property

Making the necessary preparations before investing in a rental property will ensure that you have the best experience possible. Ask yourself these questions to evaluate if you are ready.

1. Will I Be a Good Landlord?

You probably had your own landlord in the past. Did you like your landlord, or did you experience challenges? Not all landlords are created equal. Luckily, you can become an incredible landlord by keeping some basic principles in mind.

Although rental properties are considered an easy source of income, a good landlord is dedicated to growing their investment and achieving success. You must be willing to treat your rental like a business and have systems in place to keep it running smoothly.

When something breaks, do you have the skills to fix it yourself, or will you contact a repair service? Either way, having a plan will ensure you can resolve these situations quickly to keep you and your tenant happy.

2. Do I Have Significant Debt?

Investment properties can become a source of income for you and your family, but you may want to postpone this investment if you are already in debt. Investing in your future is a form of good debt, as long as you can afford the payments. It is best to wait until your current income can easily cover your debt payments and living expenses. If purchasing a rental property will make your debt higher than your monthly income can afford, then you want to pay off that old debt before investing in your first rental.

3. Can I Afford a Down Payment?

The size of your down payment on a rental property depends on multiple factors. Your credit score and financial history, whether or not you will be living in a portion of the property, and the type of financing you will use all factor into the down payment. You may find that a potential down payment is more than you can afford at this time. But you can still become a property investor.

Take some time to organize your finances, evaluate your spending and find areas where you can cut back and save even more towards your down payment budget.

Keep in mind that the larger the down payment, the more you save on interest payments. However, it is best practice to keep some savings and have a fund for repairs and renovations.

4. Do I Understand the Landlord-Tenant Laws?

Understanding the landlord-tenant laws in Pennsylvania is an invaluable skill for a rental property owner. To satisfy your tenant and the law, educate yourself about eviction rules, the fair housing act, lease requirements and other laws. Knowing your responsibilities as a landlord and your tenants' rights can help protect you from dealing with legal issues in the future.

Tips for Buying Your First Rental Property

Here are our top tips when you're purchasing a rental property for the first time.

1. Find the Right Location

If you are searching for a rental property in central Pennsylvania, you could choose a house in a city or the suburb location. To weigh this decision, you want to think about the attributes of area, such as the average rental prices, age of properties, percentage of rentals in the area, etc... You may want to consider growing neighborhoods with amenities like parks and shopping centers that are very attractive to renters. If you are planning to self-manage, you also want a location that is convenient for you to visit, potentially multiple times a week if necessary.

Use your own preferences to guide this decision because it is your investment.

2. Start Small

Unless you have a sizeable investment budget, it may be wise to start with a less expensive rental property and test the waters. Fixer-uppers require a bit of polishing, but higher-priced homes have higher operating costs that may be challenging to cover during bad times or times of vacancy. You may want to choose a property in a rising neighborhood that would benefit from a few renovations. With fresh paint and some landscaping, you can turn a middle-of-the-line house into a comfortable and appealing residence for your tenants. You may see a larger return on your investment by increasing the value of the property. Your return may be through both appreciation and cash flow.

3. Calculate the Costs

To make sure you will turn a profit on your rental, you want to analyze all of the costs you will incur. You will pay property taxes, insurance fees, regular maintenance charges and renovation costs. If you choose to cover utilities for your tenant, you have to keep track of those bills as well. Operating costs are part of investing in a rental property, and you can get a leg up by knowing what to expect. Calculating costs ahead of time will help you set the appropriate rent price and ensure the maximum return on your investment. When calculating be realistic, you do yourself no favor by underestimating to make the numbers work. Be realistic and have patience, it may take a bit of time depending on the market to locate a quality investment property.

4. Insure Your Investment

You have spent time, money and effort into finding your ideal rental property, so it is wise to protect it. In addition to a standard homeowner's policy, you want to have a landlord policy as well. These policies offer coverage for damage caused by natural forces like fire, lightning, wind and snow. You can also get coverage for damaged rental equipment stored on the property, like a lawnmower or snowblower. Landlord insurance also covers injuries to the tenant due to a property maintenance issue and even lost rental income due to a covered loss. Insurance is an investment, but you'll be glad to have it if something ever goes wrong.

How To Buy First Rental Property

Take the Next Step With a Property Manager.



If you are still unsure if becoming a landlord is right for you, consider hiring a property manager to ensure your success. Harrisburg Property Management Group can handle the day-to-day operations for your rental property, and you can trust our experienced professionals to make the most of your investment.

Sit back and collect monthly earnings while we:

• Market your property for rent.
• Take care of all tenant-related responsibilities.
• Perform regular property maintenance.
• Keep your financial and accounting information up to date.

Our company was founded by landlords who wanted a better property management service. We understand what it takes to own a rental property in Harrisburg, Carlisle and the surrounding areas.

We have managed hundreds of properties, and our experts know what landlords need. Contact us today to take advantage of our comprehensive property management services.