Buying your first investment property is a bigger decision than buying a home — it comes with ongoing obligations, not just a one-time purchase. Here's how to think through it.
- Is it right for you? Being a landlord means dealing with tenants, occasionally evictions, and monthly obligations that don't pause when life gets busy. Rental investing averages roughly 10% gross return compared to 4-5% for stocks, but it carries more risk and more hands-on responsibility.
- Get pre-approved before you shop, so you can move fast when you find something good — good multifamily deals in this market don't sit around waiting.
- Determine ROI honestly — check net annual income against expenses. The "rule of 1%" is a useful gut check: monthly rent should be at least 1% of the purchase price for the numbers to have a real shot at working.
- What to avoid — heavy fixer-uppers if you're not prepared for the work, and areas with weak tenant demand or affordability, no matter how good the purchase price looks on paper.
If being a hands-on landlord isn't the right fit for you, that doesn't rule out investing — a property management company can handle the day-to-day, including evictions when necessary, for a fee that's worth budgeting into your numbers from the start.