Keith and Kinsey's Real Estate Update

Keith and Kinsey’s 5 Rules of Property Investing

After 11 years of owning investment property, I’ve made some great decisions, made some mistakes, experienced an up market, and experienced a down market. After all this, I’ve developed 5 core rules of buying investment properties. Most of these rules can be applied to any type of investing too.

Educate yourself

Learn all you can about the type of investment you are thinking about making (duplex, 4-unit, mutual fund, etc.) and how to manage it in the future. Always ask for advice from someone who is more experienced than you.  Learn from the mistakes of more experienced people, and hopefully you can avoid mistakes of your own. Never invest in something you don’t understand.

Buy or Sell through someone that is an investor as well

If you are using a real estate agent to buy or sell an investment property, make sure the agent has investment property experience. There is a huge difference between buying or selling your home and buying or selling an investment property.

Maintain Control

Be a direct investor so that you can maintain control of your investment. Do not invest in someone else’s deal. If you don’t have the authority to make key decisions, you’re putting yourself at risk. If you do any type of partnership investing, be extremely careful and get it all in writing. Be prepared to have a backup plan if the partnership dissolves.

Don’t Gamble

Take the risk out of your investments by having multiple exit strategies. If you are doing a rehab or flip, plan to price the property below market value, be conservative with your numbers, and make sure the property will cash flow if you have to rent it. If you are buying a long term rental, make absolutely sure your property will have positive cash flow. You’re asking for trouble if you have to put money into the deal on a monthly basis.

Don’t be attached

An investment is just that – an investment. Take the personal emotion out of it and treat it like a business. You’ll be much more successful looking at it from the business side of any investment rather than the emotional side. Also, don’t be attached to one housing market. Some markets don’t make sense for investment properties. You may be better off investing elsewhere.

Feel free to email us at  for our investment property analysis spreadsheets or our input on your potential investment.


2 Comments so far
Leave a comment

Great stuff you two. Thanks for helping me understand these rules more and more each day!

Comment by Kyle

[…] by the numbers should have been our best performer, but it ended up being our worst. One of my 5 rules of investing is maintaining control, and I failed at that on this one. You lose a lot of control when you are […]

Pingback by Lesson Learned – No More Long Distance Landlording « Keith and Kinsey's Real Estate Update

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: