1. I bought cheap.
The first property I bought was the worst house you could imagine, but I could see potential. It’s easy to look at the nice pictures in the brochure and get attached to a property that is out of your budget, but it pays it buy smart in the long run. Look for houses where the owners are too lazy to even mow their lawns or check their mail, those are the houses that you will get at a much better than market price.
2. I got my hands dirty.
As soon as I picked up the keys to my first property, I was ripping up the old carpet and painting walls. You would be surprised at just how much value you can add to a property by showing it some love. Once you have painted, replaced the carpet and done some landscaping, your property has more than likely gone up in value. Put it this way, if a buyer has an inspection after all of your hard work, they are much more likely to purchase the property than they were before hand, aren’t they!
3. I used equity.
All of the hard work that I put in to my first property had paid off. The bank valued my home at $200,000 more than I had paid for it and that was only 6 months after I had purchased it. This gave me the equity to be able to purchase my first rental property and started the domino effect for my purchasing.
4. I find good tenants.
Finding good tenants is one thing that I cannot stress enough. If you are using an agent, make sure they do all of the required background checks and character references. If you speak to investors that have quite a few investment properties, 90% of them will have horror stories all the way from the tenants not paying rent to the house being completely trashed. Be careful.
5. Don’t live beyond your means.
I am not one to stay at home and do nothing but I am also not one to head to the casino and spend $2,000 on a night out. Be careful with your money without living like a hermit and start to get your loans paid off. This might mean having one holiday per year instead of two or even driving a car that’s not your dream car just yet.