"Buy one home per year!" has become my most dispensed advice to my clients, my agents, my friends 
and family. If you do nothing else but that, you will have long term financial freedom.
Rules of thumb:
- Do the math! Make sure that what goes out, comes back in. If your monthly payments for principal, interest, taxes, insurance, HOA dues, etc. are $ 1,000, make sure that the fair market rent for that area is around the same amount.
- Put money in reserves. You should have at least 3 months of payments saved in a special account, in case you can't find the right tenant fast enough. I prefer having a 6 month reserve for my peace of mind.
- Advertise the rental on Craig's List. It is the best source of leads I have ever found for both rentals and sales. It's free, so why not use it?
- Interview your prospective tenants as if you were interviewing a prospective General Manager for your business. Charge the prospect an application fee to cover both a credit check and a background check. Interview in person and pay attention to details. Ask lots of questions. Don't ask: "Do you have a pet?" Instead ask: "What kind of pet do you have?" You get the drift...
- Don't forget to take advantage of depreciation, which will greatly impact your personal tax burden. It's one of the great secrets of the big boys, and it certainly will make investing even more appealing.
- Don't forget to take advantage of the "tax deferral" via a 1031 Exchange. That's another secret of the Big Boys. It's not called Tax Avoidance, it's termed the innocuous "Tax Deferral", it just looks like a tax avoidance to an outsider...
- Read the book "Landlording on Autopilot" by Mike Butler. It is the best book on all nuances of investing and managing your properties. It is entertaining, captivating, extraordinarily educational and an easy read. I am recommending it to all my friends, agents and clients. Great book!
As Real Estate Agents, you can benefit greatly by having rentals of your own. Many of the callers we get on our rentals are bonified buyers with a little coaching from us. The ads for our rentals provide us with a unique stream of buyers, whether they purchase now, or just rent from us for the time being and buying later. When you help a person get their ducks in a row and become a home owner, you not only improve that person's life and finances, but you also garner a client for life. If you are a good enough educator, you can impart the wisdom of "Buy one home per year" to that client and "mushroom" your success by helping other people succeed. Try it! You'll agree that it's a long term winning strategy...
Your Myrtle Beach Real Estate Connection, Mirela Monte, GRI, ABR, BIC, SC, NC.
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