Author Topic: Who to talk to prior to purchasing a rental?  (Read 1516 times)

FastStache

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Who to talk to prior to purchasing a rental?
« on: September 08, 2013, 08:40:54 AM »
I'm making a list of everyone I need to contact prior to purchasing a rental.

1. Accountant - set up the books, etc.
2. Lawyer - help with drawing up the lease? Anything else?
3. Home Insurance - Rental insurance.
4. Umbrella insurance - Needed once you become a landlord?
5. Property management - I would need to set up property management given my hectic schedule.
6. Repairmen - If no property management or as a back up.
7. Realtor - need someone to help with the paperwork
8. Bank - need to have someone ready to help with the financing.
9. Mentor/forums - have somewhere where I can get answers on simple questions.

Am I missing something from this list? Does anyone have a rough order of magnitude as to the cost of an accountant and lawyer?

If I go with a property management company is a lawyer still necessary or do they handle it?
« Last Edit: September 08, 2013, 09:06:14 AM by FastStache »

KingCoin

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Re: Who to talk to prior to purchasing a rental?
« Reply #1 on: September 09, 2013, 06:20:22 AM »
I'd add home inspector/pest inspector as well as title insurer to the list.

The necessity of the other items is going to be pretty contingent on the specifics of your situation.
« Last Edit: September 09, 2013, 06:24:55 AM by KingCoin »

Another Reader

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Re: Who to talk to prior to purchasing a rental?
« Reply #2 on: September 09, 2013, 07:40:39 AM »
If you hire property management, they will use their lease.  They will probably have an attorney that does evictions.  So drop the attorney from your list.  They will also provide you with income and expense statements.  If you have an accountant do your taxes, just take the year-end statement plus the expenses that you paid outside of the management company to the accountant.  If you are planning on having lots of properties you manage yourself, you will want to set them up in QuickBooks or look into landlord-oriented accounting software.  Buildium has been mentioned elsewhere in this forum.

Umbrella insurance is useful.  Tenants do sue.  Start by calling the carrier you use for your own house and price rental and umbrella insurance.

If you buy a property listed on the MLS, you will probably want an agent to represent your interest.  If you buy direct from a seller, you will represent yourself.  As you are an inexperienced buyer, I recommend you get involved with your local real estate investors association and that you talk to agents that work with investors.  You need to understand the process before you write any checks.

After you have figured out what kind of investment property you want to buy and what you are willing to spend, then start talking to lenders.  If you use an agent, get referrals.  The REIA folks may have lenders they like as well.

Read all the practical land lording books in the library.  If the title says something about how to make 10 million dollars in one year with none of your own money, leave it on the shelf.

zinethstache

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Re: Who to talk to prior to purchasing a rental?
« Reply #3 on: September 09, 2013, 01:45:34 PM »
Another Reader covered it all.

I used a lender my realtor recommended, that worked out great. I found the PM myself, sent out inquiries via email, then did phone interviews.

Now I am working on a tax accountant, I've always done my own taxes but want to make sure to get all of the deductions possible with adding the rentals. I started by location and have contacted three firms. I am still working on this one.

We do our own inspections, not my choice, but so far DH hasn't steered us wrong... definitely want to have the inspector and specialty inspectors already lined up as once you are under contract the inspection is a fixed window of time.

Love the idea of getting involved in the local REIA, or any other investment club to soak in the knowledge. I do fear that many of those folks are flippers or wholesalers, we are going the buy and hold rental route for now.