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

New homeowners admiring their first property purchase It can be a thrilling experience to purchase your first Washington single-family rental property. Yet, compared to all investments, there are some risks involved. To guarantee that your first investment property purchase in Washington becomes as rewarding as you hope it will be, there are a few aspects to consider 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 prioritize? How will you finance your purchase? In what follows, we will examine these concerns and other critical points you’ll need to understand to make getting your first rental property a rewarding experience.

Define Your End Goal

When purchasing your first single-family rental home, one of the first things to consider is to set clearly defined end goals. Before you proceed with your property search, it is advisable to determine what qualities you are looking for in your investment property. For instance, you might be in search of properties in a particular area with a specific number of bedrooms or minimum square footage. You can even target an individual renter demographic, including college students or retirees. Knowing the basics allows you to refine your search criteria and locate potential properties more swiftly.

Prepare Your Finances

Apart from knowing what qualities you wish in a property, it is a good idea to prepare financially before getting an investment property. Industry experts recommend paying down personal debt and saving for a down payment before beginning 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. Planning to finance in advance is another critical step, but be wary of high-interest loans or mortgage products that seem too good to be true. By prequalifying with a respected mortgage lender, you will be ready to embrace investment opportunities as they become available. By prioritizing financial readiness, you can boost the potential to acquire that rental property with confidence as they arise.

Crunch the Numbers

After taking these needed preliminary steps, the search for the best property begins. During your search, don’t forget to run a series of numbers on each possible property, such as your margins, operating expenses, and expected return. This is where many inexperienced investors make critical mistakes.

Newbie investors should 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 worth noting that an investment property is just that, an investment. Getting attached to a specific property or allowing emotions to dominate your actions is not a good idea. Furthermore, the property you buy is not necessarily one you would ever live in yourself. Industry experts advise buying low-cost properties in high-demand areas for your first investment. However, keep away from fixer-uppers unless you are a highly skilled home remodeling expert or know a trusted contractor that finishes the task at a lower going rate. Your first single-family rental property should be regarded as the first step toward a long and profitable investment career rather than the end goal. With this strategy, you can keep yourself on track and your investment properties in the black.

Design a Management Strategy

Ultimately, it is worth noting that acquiring a rental property is just the first step. You need a proactive management strategy to ensure a return on your investment. A Washington property management company can be advantageous in this situation. As local market experts, property managers can help you discover off-market investment properties, analyze market conditions, set rental rates, and much more. The ideal property management company is a vital partner in profitable rental property investing, as more veteran investors will tell you.


If you’ve located the ideal investment property, make sure you pick the right Washington property management team. Contact Real Property Management Southern Utah at 435-673-4242 today.


Originally Published on March 13, 2020

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