Lenders need to know what a property is worth before they can make a loan secured by the real estate. If you stop making payments and they have to sell your house through foreclosure, they want some reasonable assurance that they will get their money back. Lenders also base their decisions on your ability to pay (your income and expenses) and your willingness to pay (your credit history).

Recently, the lending industry has become highly competitive. Banks are merging, streamlining the loan process, closing branches and installing automated tellers. Lenders are increasingly using unlicensed appraisers, limited “drive by� appraisals, and computerized “automated valuation� models to support their loans. It is even possible that you may be able to buy a house, refinance or get a home equity line of credit without ever seeing an appraiser.

A bunch of appraisers who only work for lenders are going out of business. Other appraisers are now marketing a wide variety of services directly to the public.

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A simple and quick way to get a large applicant pool, and to find a well-qualified candidate, would be to put an ad into the local paper. When doing this it is important to provide as much information as possible. This is important because you don't to waste any of your or your applicants' time. From there tell applicants to send in a resume or to apply in person.

There are simple ways to sort through resumes of applicants. Mispellings and poor grammer in cover letters are red flags telling you that these people should not be your apartment manager. Sort them between "good", "bad", and "maybe". In most cases, previous experience isn't required, but a strong educational background is important. People with experience will try to bring in preconceived ideas that may not always be good.

Beyond all of this, before hiring anyone it is always a good idea to do a full criminal background and a pre-emplyoment drug test. You want to look for someone with a professional, friendly image. One that can make the tenants say "this is a well-run place. Everyone is so friendly. I don't want to leave."

It is important not to give your newly hired manager too many reponsibilities. Gary Miller, CPM, is American Property Management's Vice President of Residential Property. He says, "I find that people get burned out, a lot of times by an owner or manager who may be trying to have them do too much. Have this manager run the whole show, pay the bills, hire the vendors, go to court, the whole nine yards. There should be an employment agreement that outlines all of the job responsibilities, outlines what the compensation is, and the agreement should be signed by both parties."

For starters, when buying a rental property lenders typically require down payments of 20% to 25% of the property. Some lenders want up to 40%. This is true because lenders believe investors are more likely to walk away from a rental than they are from their own home.

As a landlord, you do get many tax breaks. What you spend on upkeep and repairs for a rental is typically tax-deductible. There is also tax breaks on the depreciation on the rental. Tax breaks can make a big difference in your profit, but as a landlord you should not count on them. It would be wise to look for properties that will rent for more than the monthly mortgage, insurance, and tax payments, to ensure that you have stable cash flows. Good cash flows will also allow you to make repairing the rental easier.

The biggest thing that I am learning as I research more into becoming a landlord is that the return on most initial investments is quite low. Mastering real estate investment is not as easy as it seems. One must build up skills as a landlord and master the art of property management. It is important to learn how to maximize your profits. Real estate is definitely a long-run investment.

Seven Hills and Olmsted Falls were our prime choices. The houses in these cities were not right on top of each other, and my parents valued their quality of education. We found a rising develpment in Seven Hills where my twin brother Dustin and I knew some kids that were already settled in. We scoped out many other properties and decided that this Seven Hills development was our best option; and really just what we were looking for.

Most of the homes in this development were rather large. The owner of the development had set a minimum value on the houses that were to be built in the development. That minimum balance was at the very top of our budget, and then some. So with my father doing some plumbing in the house, and some electrical work, and some heating and cooling, and some concreting, we were then able to afford the house by saving on the labor costs. Believe me, us kids put in hours working on the house as well.

What's the take away message? Our family moved into one of one of the smallest houses in a rather well-built neighborhood. Our neighbor's house values at half a million dollars (one of the largest in the neighborhood). By being next to this house alone greatly increases the value of ours. It is important to take the time and do the research when looking for the best home or property investment. In most cases, the more effort you put in a decision, the more you will get out of it.

The Final Step
It's not over yet, make sure all the required paperwork is done. If the title work, mortgage, homeowners insurance, and other items required under state and local laws are not completed, the closing may not happen on time. Then depending on the restrictions of the contract, fines or loss to the rights of the home may result.
After all of this, the house is yours. Now would be a great time for renovations and fixing up the place, especially if you plan on investing labor into the property just to resell it; and if your moving in, your stuff won't be in the way for the renovations.

Step Four: Making an Offer
After you found the hone you want, you need to make an offer. This is a difficult task and a real estate professional should also be seen. If you have any personal interaction with the homeowner, do not give out any information about your move, your current housing status, financial status or your feelings about their property (positive or negative). These could hurt you in future negotiations. Follow these guidelines and YOU WILL SAVE A LOT OF MONEY!

Step Two: Figuring Out What You Can Afford
Once you know what you want, you need to find out what you can afford. Take a look at how much you have saved up, and then take a look at your income stream and expenditures in future years to come. The next step is to get pre-approved for a mortgage. This will achieve two things. First, it will tell you what you can afford and what your monthly payments should be. Second it tell the seller you can afford his or her home. A pre-approved buyer now has leverage when it comes to the negotiation process, AND YOU CAN SAVE YOURSELF MONEY.