Category Archives: Investment Property

When it comes to securing your retirement through rental properties it is best if you understand your criteria when buying income property.  Today I sat down with a fellow realtor here in the Kansas City area and two investors that own one rental property with plans to add many more.

What I found is what I usually find.  You see, I asked them what their criteria was for what they were looking to acquire.  I’m not picking on them, I’m really truly not when I say they did what most newer real estate investors do… they went silent.

Investment Property Criteria Part 1

Investment Property Criteria Part 2

Those links above the picture are the links to a series of videos I did for real estate agents seeking to work with investors and for the investors themselves.  Here are a few things you should know what you are looking for before going too deep in to your next investment property search;

• What return are you expecting?
• How do you measure the return?
• Location?
• Bedrooms?
• Single Family Home or Multi?
• Rehab or Turn-Key?
• Is the school district important?

I could add a whole bunch more.  Or, you could watch those videos.  Listen, I know the videos are boring.  I don’t know how to make real estate investing more exciting unless I stand in front of a rented garage full of luxury sports cars and half dressed women.  Oh wait, for the gurus out there I’m sorry (not) if I offended you.

Remember that when you own residential income property that you own a “business.”  Everything you do that is an expense is deductible from the income of that business.  And don’t forget the mileage.

Each time  you drive over to show a house, fix a door knob, check on the trash the tenant left outside the house, etc. you are conducting business and those miles are tax deductible.  So don’t forget to have a log book that logs the mileage and purpose of each trip, as required by the IRS.

I use a digital log book on my phone called TripLog.  But there are several good apps out there.

Mileage adds up quick! Don’t forget this deduction.  Plus, it helps you to think of your rental properties like a business.

People often ask where I draw the line at what homes we sell to buyers or what homes we will manage for owners.  My answer is always a question.

Would you live in it?

We want clean safe homes in decent neighborhoods when it come to real estate investing.  Now, decent is a relative term. Where you come from, how much money you make, etc have a lot to do with what you consider decent.  But to me,  decent has to do with the relative value of a home in proximity to it’s surroundings.

Let me explain further. If the neighborhood the house is in is mostly rental property, it’s probably not going to appreciate along with the city or county rates. Too many rental houses bring a neighborhood down.  Lack of maintenance or tenant care are usually the biggest reasons for that.

There are several neighborhoods around Kansas City where investors (usually out of state) have come in and bought so many homes in an area that I worry about the long term viability of those investments.

Clean. Safe. Maintained. In a neighborhood of “stake holders” and one that has long term viability as far as expected appreciation relative to city averages.  That’s what I’m looking for in property to recommend to my investor clients.  And those are the kinds of homes we love to manage.