Investor paths
Four ways into rental investing, each walked from the first decision to the first income. Pick one, go stage by stage, and make the calls a real deal asks of you.
Meet Maya. A hospital pharmacist with $85,000 saved and a steady paycheck, who wants income that does not depend on her shifts. Her fear is the 2 a.m. phone call: a tenant who stops paying, or a furnace that dies in January.
- Start to income
- 3 to 5 months, from deciding to the first rent payment
- Cash needed
- About $72,000 out of pocket on a $240,000 house (a $60,000 down payment, $9,000 of closing costs, a $500 inspection and $2,500 to make it ready), plus about $9,600 kept as reserves. Example figures.
- Risk
- Low
- Workload
- Medium
Maya is a composite, not a real investor. Every figure is an example.
Week 1 to 2
Decide what you are buying
You choose a long-term rental, a market you can drive to and the kind of house you want. A one-sentence buy box turns a thousand listings into a dozen.
What you do
- Write down the cash you can invest without touching your emergency fund
- Pick one market and read 20 to 30 rental listings there
- Write your buy box: type, area, price ceiling and minimum rent
Who else is involved
- An agent who has sold to investors
- A property manager or landlord who knows local rents
Read more: How to start investing in real estate, Airbnb vs long-term rental
Week 2 to 3
Know your numbers
Week 3 to 6
Find the house and run the numbers
Week 6 to 7
Go under contract
Week 7 to 8
Apply for the loan
Week 8 to 10
Underwriting
Week 10 to 11
Close
Week 11 to 12
Make it ready
Week 12 to 15
Find your first tenant
Month 4 to 5
The first rent arrives