First Rental Property

Hi Friend,

I hope that you are doing well.

One question that I often get asked by motivated, new real estate investors is:

“How do I analyze an investment property.”

When I was first starting out as a real estate ‘investor’, I did not know anything about how to analyze an investment property.  Things worked out for me as I ended up buying my first rental property in Oakville.  I went on to buy Oakville real estate, Toronto real estate and Hamilton real estate.

Analyzing a rental property can be as simple as you want to make it, or as complicated as you want to make it.

How To Make Things Complicated

Generally speaking, new real estate investors make, analyzing a rental property very complicated when they are not truly ready to take action.  There are always many, many reason as to why you should not take action and not buy a rental property.  After all, what happens if:

• You can’t find good tenants?
• The tenants don’t pay rent?
• The furnace breaks down?
• The air conditioner breaks down?
• The hot water tank breaks down?
• The property requires regular repairs and maintenance?

There will always be many reasons as to why you should NOT buy a rental property.

If you are not educated enough on the process of buying rental property, chances are that you will not take action.

Therefore, the analysis of a rental property becomes a mute point, because no matter what the numbers tell you, you will never feel comfortable enough to move forward and make the purchase of the rental property if you are not educated on the process.

How To Make Things Simple

Things become very easy for you as a new real estate investor when you:

• Educate yourself, and
• Simply look at the numbers

Educating Yourself

It is easy for new real estate investors like yourself to take action once you have educated yourself on the process of real estate investing.  The more educated you are, the better.  The less education you have obtained, the more difficult of  a time you will have with moving forward and making the purchase of a rental property.

Simply Look At The Numbers

Analyzing a rental property is very easy.  I will say again, analyzing a rental property is very easy.  People make the task of analyzing a rental property more  complicated than it actually is.  It is not complicated at all.

What you have to do is take a look at what the revenue and expenses.

You need to examine these figures on a month basis.

For example, if the total revenue (rent) for a rental property is $1,500/month, and the total expenses are $1,100/month, this means that the rental property has a positive cash flow of $400/month.

You get the ‘cash flow’ number by subtracting the revenue $1,500 from the expenses $1,100.  ($1,500 – $1,100 = $400)

There are always other factors to consider when purchasing a rental property.  For example, the location of the rental property is a big factor.  You can refer to these blog posts for further information on, how to pick the right location:

How To Buy A Rental Property In A Great Location

How To Buy A Rental Property In The Perfect Location

How To Buy A Rental Property In The Right Location

 In Summary

At the end of the day, analyzing a rental property is not complicated.  You need to simply take a look at the revenue and expenses of a given rental property.   You also need to remember to not over complicate things because analyzing a rental property is easy to do.  Make sure that you educate yourself regarding real estate investing, so that you are ready to take action when the right property comes along.

Happy Investing!

Best Regards,

Neil Uttamsingh

ps: Remember, I am an experienced real estate investor and Licensed Realtor.  I help new real estate investors like yourself purchase their first rental property!  If you are interested in purchasing Oakville real estate, Hamilton real estate or Toronto real estate, send me an email at NEIL@FIRSTRENTALPROPERTY.COM and I will help you get started!