Tips for First-time Buyers of Rental Property

1. Tips for First-time Buyers of
Rental Property
By: Stuart Hansen China

2. Tips for First-time Buyers of Rental Property
Stuart Hansen, Vice President of Marquee Asset Management, LLC, coordinates investment
opportunities in real estate. With investors from China, Japan, the UK and Canada, Stuart Hansen
is also responsible for assisting with investment opportunities in the United States. Rental
properties are some of the few real estate opportunities the company oversees. For first-time
buyers of rental property, making this type of purchase could be challenging without assistance.

3. Tips for First-time Buyers of Rental Property
Beyond the basics of purchasing property, first-time buyers can prepare in a few ways. First, it is
important for the buyer to have an understanding of interest rates and how they might impact
payment. Not only that, interest rates typically are higher than that for a standard mortgage loan,
so prospective buyers should search for the most competitive rate.

4. Tips for First-time Buyers of Rental Property
Investors should also calculate margins before making a purchase. Distressed properties have
returns for between five and seven percent because of overhead, but outside of this category,
prospective buyers should plan to have returns of around 10 percent. Prospective buyers should
also plan to allocate one percent of their returns for maintenance costs.

5. Tips for First-time Buyers of Rental Property
Compare calculating costs with the return on the investment (ROI). Look at how much money has
to be allocated to maintain the property and then examine the property’s earning potential. Once
calculated, compare this figure with other investments that might yield more of a return to consider
whether making this type of investment is worthwhile.

6. Tips for First-time Buyers of Rental Property
Reconsider purchasing a distressed home. Funding a fixer upper can be exhausting (and
expensive) if the buyer is unfamiliar with flipping homes or does not know a quality contractor.
Instead, choose a low cost home that can be move-in ready once purchased.