How To Buy A Rental Property: Landlord Guide (2026)

Research Rental Markets and Neighborhoods

First, you’ll need to decide where you want your rental to be. If you’ll be managing it yourself, choose something relatively close to home.

You should also make sure you understand state and local landlord-tenant laws in each area you consider. Some cities and states impose more arduous requirements on landlords than others.

Choose the Right Type of Rental Property

Do you want to buy a single-family home, a duplex or even a home with an attached apartment? If you can generate multiple streams of income from one property, that’s generally a good thing. However, keep in mind that renting to two or more tenants also comes with more complexity.

Estimate Rental Income, Expenses and ROI

Investing in real estate can be time-consuming, especially in the beginning. Before you buy a property, determine how much you could realistically earn each month. Then, calculate your estimated return on investment (ROI) to decide whether it’s worthwhile.

Secure Financing and Get Preapproved

Unless you’re buying the property in cash, you’ll need to apply for financing. Getting preapproved can make the process easier. With a preapproval in hand, you’ll know which properties you can realistically purchase.

Make an Offer and Close on the Property

Once you’ve found the right property for your needs, it’s time to make an offer and close on the property. However, because real estate transactions can be complicated, you might consider assembling a professional team to help you, including:

• Your real estate broker
• Your real estate attorney
• Your tax professional

There’s no way to guarantee a problem-free transaction, but having a professional team reduces the risk of complications.

Decide Whether to Hire a Property Manager

Should you hire a rental property management company or handle all of your rentals yourself? If you only have a couple of properties, managing them yourself might be doable. However, as your portfolio grows, you might have trouble keeping up.

A property management company often takes between 8% and 12% of the rent your property generates each month. But your manager will typically handle maintenance, tenant screening and other key responsibilities.

Find and Screen Quality Tenants

Tenant screening is one of the most important steps you can take as a landlord. It helps to set clear standards, like a minimum acceptable credit score, and include them in your rental listing.

Using a tenant screening service may also make this step easier. You’ll be able to view credit checks, background reports and other relevant information on tenants you’re considering.

Start Your Rental Business Off Right

Successfully managing rental properties can be uniquely challenging, but worthwhile. Whether you’re setting off on your own or working with a property manager, it all starts with your first property.