Looking at buying my first rental property next year

So I am venturing into rental properties and my primary market I am looking at is aberdeen. But I am also very very curious about baltimore since there seems to be deals all over but I have also been told to stay away from baltimore for rental properties.

I find it hard to believe that everywhere in baltimore is crime ridden and you only get horrible renters. So I am looking for advice from anyone with experience on this subject since I would seriously consider looking at baltimore for investment.

My goals are simply, I am looking at finding places that have at least 500$ profit per month and if all goes wells with my first property then I would want to look at buying 1 property per year.

  • August 10 2014 - Baltimore
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Answers (6)

Profile picture for Alan Grizzle

I live in Dahlonega Georgia so I can't advise you on that area, however there are some basic principals that will serve you well in any are for rental property.

First you have to buy at the right price. What is the cost of the property? How much is it going to take to get it ready to rent? What is the realistic expectation of monthly rent? 

Just as important is you buy a property that will attract a quality tenant. A quality tenant is one that pays on time, keeps the property clean and does not damage the property. If you have a run down property or a property in a bad area you will have a hard time finding the type of tenant you want. 

You need to know what the demand for rent is in that area. For example we have The University of North Georgia in Dahlonega. You want your rental to be within 10 minutes of the college in an area that appeals to the students and their mom and dads who are footing the bill. If there is a factory or mall that employees a lot of people that rent find a property that is convenient for them to go to work.    

Keep the property in good repair. If you don't you can't keep good tenants. If the market is not hot for rentals price yours a little below market rate, you will end up better off in the long run. If the market rate is $1000 per month for similar property's and there are several available price yours at $900. There is a good  chance yours will rent first. If you kept the rent at $1000 and it takes you two extra months to rent it it is unlikely the tenant will stay long enough to repay the $1800 you got the first two months. You also have a greater risk of getting vandalized at a vacant property.

Do a credit and background check on the tenants. You don't want somebody that has never paid anybody on time. You can be understanding if somebody got sick or hurt  and has medical bills or somebody lost a job during the downturn and had to take a lesser paying job. They may have lost a house to foreclosure. You can still look at the credit and it has been good up to the event that got them behind they will most likely do everything they can to rebuild their credit. There are a lot of really good people that will make excellent tenants that went through a hard time during the recession.  If your applicant has never paid anybody on time and everybody and their brother has a lean filed on them you don't want them.   

  • October 28 2014
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Baltimore City can get you high rental returns, but it's important that you know your market areas.  Study the proximity to schools, hospitals, major employment centers, highways and night life.  These characteristics attract more demand for rentals, thus increasing your IRR (Internal Rate of Return).  Also, make sure you get advise from someone experienced who can help you calculate all your expenses in detail.  If you miss anything, those $500/mo in cash flow can quickly evaporate. Good luck!
  • October 28 2014
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Profile picture for gator70
I'm a rental property owner myself. What I have learned,  is to locate a market and become an expert for that market before you do anything else. Know that market so good, you could support any argument.

This should take you over a year with many hours of hard work. I would act like you are a renter and tour properties for rent. Locate another landlord in that area and take them to lunch, ask them the hard questions. The target property should provide you with some extras. Can you get more than market rents? Is there the ability to improve the property over time and raise rents. What are the downsides and look back at historical rents to evaluate your risks. 
  • September 27 2014
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Profile picture for eric mc
I would definitely agree with the others on staying close to home on the first property.  Truly, the reason I would stay away from Baltimore for your first rental would have more to do with all of the extra rules and regulations within city limits.  
  • September 26 2014
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I'm a rental property owner myself, and I've worked to help others become real estate investors themselves over the past 27 years.  I recently taught a real estate investment seminar at my office to my friends and past clients who were interested in becoming investors.  And I'm currently working with several investors to help them expand their real estate portfolio, while always considering the rates of return that these properties need to provide.

As far as where to buy, and areas of opportunity to make money on rental properties, I'd be happy to have a conversation with you about your specific goals and the kind of time you have to commit to being a landlord.

There are certainly opportunities in Baltimore City, but perhaps for your first property, you may want to consider something close to home that you can keep an eye on, and get a feel for being a landlord.  .  It will also give you a chance to become familiar with your obligations as a landlord, as well as opportunity to handle some of the more common tenant issues.  There's a lot of area between Aberdeen and Baltimore City that may present suitable properties.

Feel free to contact me through my Zillow profile.  I'd be happy to answer any questions you may have.
  • August 10 2014
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As with any market, you must do your research. Baltimore has had its issues over the years, but as you said, there are deals to be had there, and in terms if the renters, if you vet them properly, you should be fine.
Starting this early in your search is a plus, it will give you time to research and develop a good picture and make a decision that is best for you!
Best wishes, Jim
  • August 10 2014
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