Rental investment service providers and advice
We are looking to purchase an investment property as a rental. Are there any service providers we can pay to talk to for advice on on a good location for that (i.e. we are hoping to purchase in a location where rental market will support setting the rent at an amount that will cover mortgage, real estate tax, etc. so that we at least break even)? We are not looking to make much on the rental income as we view it as investment in the property, but do want to make sure we at least break even and are not bleeding money on the property (with the exceptions of when it is sitting empty). We want to invest in real estate but worry about making a mistake or investing in the wrong place and just want someone to get advice from, but have no idea who is the right service provider for that discussion. We also will have questions about how to set rent and deposit and run checks on potential tenants to minimize the risk of getting tenants that will not be paying rent. I know it is the pandemic and with the economic uncertainty it is likely a bad time to invest in rentals, but hoping that by the time we find and purchase one and get it move-in ready and locate potential tenants the vaccine will be available and the state will re-open so that it will be less of a risk. Any advice for service providers, professionals, or even books/online resources would be greatly appreciated. If you went through this decision process yourself, and decided to do it, any advice and warnings from personal experience would also be greatly appreciated.
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We have had many rental investment properties, and have learned a few things through the decades. You don't need to pay anyone for advice -- you can do it for yourself, and probably should as every person has different criteria for what is a successful rental property. Youtube is your friend for research. Just start looking around. Have you decided on a state? Maybe somewhere nice that you would like to visit, as checking on your rental is a tax deduction. A rental property in California is very different from one in,say, Texas. If you are in a hurry, you will make a costly mistake. Research states, cities, places, neighborhoods, populations. Take virtual tours. Look at properties in your price-range. And after COVID, go visit. A rental investment if not done carefully, can lose a lot of money and demand a lot of unexpected time and resources. But if you take your time, are patient and wait for the right fit for you (like a spouse) the returns are excellent and headache-free.
Howdy potential landlords. Way too much info to type, much of which might only lead to more questions, but I'm fairly certain I can answer all the questions you listed. If you'll contact me at kgmkirk at gmail, I'd be happy to get us connected, answer your questions, and give you a bit of a primer on how to determine a money-maker from a struggler, and some rules of thumb for how to ball park costs, income, and their relationship to purchase price. I've owned small rental properties for a decade. Not a realtor, not a "rental service provider." Have learned by doing. Best to you in the meantime.
It actually may be a good time to invest in rentals. Since Prop 19 passed in California, the calculus of passing property on to offspring has changed, and as a result, owners are selling. Prices may be depressed because of empty units or people not paying their rent. Could be risky, but could work out well. Unless you put down a huge down payment, expect to run in the red for a least a few years. Generally, property owners depend on inflation to get a profit. You didn't mention rent control, which can be quite a headache. I would recommend that a beginner not buy in a rent controlled area. Setting rents can be difficult. It used to be that you could check craigslist for similar units and average those numbers. But craigslist is so full of lowball scams now, it is mostly useless. In general, check rental sites and go look at rentals to figure out prices. As for background checks and credit checks, I think you can just google that to find a service. I don't know if there is a legit service provider that can help you get into this business. You may want to go look at lots of properties on the market. The real estate agents will do a sales job on you, but you will learn a lot in the process. Good luck!
I recommend starting investing in cities other than Berkeley. Berkeley has so many anti-landlord rules which can be very challenging (ie. rental control, rent ceiling, yearly payment to rent board for each unit you own, yearly fees for business license, can't use prior eviction or criminal hx in selecting tenants... the list goes on). Consider nearby cities still close to BART and good schools for investments (ie. Albany, El Cerrito, Kensington etc)