• Skip to main content
  • Skip to primary sidebar

Cade Hildreth

Everything You SHOULD'VE Been Taught in School.

MENUMENU
  • Blog
  • Finance
    • Cryptocurrency
    • Real Estate
    • Gold and Silver
    • Investing
    • Increasing Income
    • Financial Q&A
  • Real Estate
  • Health
    • Fitness
    • Nutrition
    • Confidence
  • LGBTQ+
  • Podcast
    • "What You Should've Been Taught"
    • Audio Feed of the Website
    • Ask a Podcast Question
  • About
    • Testimonials
    • About Cade
    • Rugby Bio
    • Instagram
    • Contact
You are here: Home / Finance / Real Estate / How to Buy Your First Rental Property: A Step-by-Step Process
How to Buy Your First Rental Property: A Step-by-Step Process

How to Buy Your First Rental Property: A Step-by-Step Process

September 14, 2021 By Cade Hildreth Leave a Comment

I was recently asked on Instagram, “How can I buy my first investment property?” It is an important question, because everyone has to start somewhere.

So, how did I answer it? I decided to share how I got started, including my exact step-by-step formula.

Read on to find out how I went from no real estate to a multi-million dollar portfolio of residential and commercial properties.

How to Buy Your First Property

The easiest way to get started is to buy a primary residence (i.e., a house where you’ll live) and rent out a bedroom to begin to learn about how to be a landlord.

This is not technically a “rental property,” but here’s why it’s an incredibly effective place to start.

First, you don’t need very much money down to buy a primary residence, which will help you afford your first place. For example, if you served in the U.S. military, you can buy a house for 0% down using a VA loan. Similarly, if you buy in a rural area, you may be able to acquire a home for 0% down using a USDA loan.

If you can’t qualify for one of those options, then you can probably get an FHA loan that requires only 3.5% down.

Plus, you’ll get a notably lower interest rate on this mortgage because you’re acquiring a primary residence, usually about a point (1%) lower than if you were acquiring a mortgage for a rental property.

Most importantly, renting out a room will teach you about the in’s and out’s of being a landlord, including the legal protocols that you’ll need to follow.

Best of all, renting out a room in a home you own is a practical, straight-forward way to learn about the basics of leases, move-in and move-out inspections, payment collection, tenant communication, property maintenance, HOA fees, pest control, and other key aspects of welcoming a tenant into your world.

Trust me, there’s a lot to learn, so this is a great way get started with some “training wheels” on.

After getting comfortable with that, move out and fully rent this original house to tenants, while you either go rent elsewhere or buy a second place for yourself.

Primary Residence vs. Rental Real Estate

The reason to rent elsewhere if you have to (while you save up for a second place) is that although both primary residences and rental properties have tax advantages, rental real estate has more of them.

When you live in a property as a primary residence, you can write off your mortgage interest and exclude up to a quarter of a million dollars ($250,000) of net profit from being taxed when you sell your home. That number goes up to a half million ($500,000) if you’re married.

Known as the IRS’s Home Sale Tax Exclusion, this is like Uncle Sam saying, “Hey, don’t bother to pay me taxes on that $250,000 or $500,000 you made. We’re all good here.”

Let’s just say, it’s incredible. For example, that will probably never happen to the money you earn through an employer paycheck.

However, what is even better than owning a primary residence is controlling a rental property.

Tax Benefits of Rental Real Estate

With rental properties, you get even better tax benefits. First, you can deduct depreciation, which is the IRS’s way of acknowledging that the value of buildings and materials that compose them decline in value over time. This can be a huge help come tax time.

You can also use what is called a “1031 Exchange” to avoid all taxes at the time of sale—yes, all taxes (it’s wild but true).

Plus, you can deduct a wide variety of things against your rental income, including:

  • Mortgage interest
  • Property taxes
  • Repairs
  • HOA fees
  • Pest control
  • And many other relevant operating expenses

This means that your rental income will be highly “tax advantaged.”

Of course, if you do things write, you’ll also get monthly cash flow from that rental property, the tenants will pay down your mortgage, and the property will appreciate in value over time. Amazing!

Finally, your fixed mortgage payment will go down over time in inflation-adjusted dollars. Then one day that mortgage payment disappears, and your rental cash flow explodes!

How To Buy Your First Rental Property, Today

To recap, I’d recommend that you start by buying a property as a primary residence and renting out a room within it to learn about being a landlord.

As mentioned above, there’s more to it than you might think. When you’re able, move out of that home into a rental property or another house that you purchase, and rent it out in entirety to tenants.

This is how I got started and should get you off and rolling. As your cash flow grows—aided by the juicy tax advantages described above—you can keep acquiring more properties.

Before you know it, you’ll have your own real estate empire simultaneously kicking off cash flow and building your long-term wealth. Good luck!

Join a million other readers who are learning Cade’s secrets, like increase income, invest for cash flow, boost confidence, or lose 10 pounds, fast.

Are we connected on social media? Let’s do it so I can share in your world too: Instagram | Twitter | Facebook | Pinterest | Podcast

4.9/5 - (29 votes)

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)

Filed Under: Real Estate

Reader Interactions

Tell Us What You Think! Cancel reply

Primary Sidebar

  • Instagram
  • Twitter
  • Facebook
  • LinkedIn
  • Pinterest
  • TikTok

“As an LGBTQ+ entrepreneur, real estate investor, former USA Rugby Player, and fitness fanatic, I’ll teach you what your parents and teachers should’ve taught you, but didn’t know themselves.” -Cade Hildreth

Want to know what I learned making my first few million? Subscribe here.

Or, listen to Cade’s articles on the go as a Podcast.

Because it’s the New Year, let’s talk about ch Because it’s the New Year, let’s talk about change...

For a long time, I’ve thought about top surgery. I remember when I was 6 or 7 years old when I wanted to run around outside on a hot, sunny day with my shirt off…and I first saw my parents… hesitate. Ughh. 

It wasn’t their fault but I still remember that heart wrenching feeling. To their credit, they ultimately said, “Ok, go do it!” While I did “do it”, I remember the feeling of shame that crept in.

Over the years, being in affirming sporting/rugby circles helped suppress the urge to get top surgery, but it never quite “stayed down.”

So last summer I got keyhole #topsurgery. I’ll talk about recovery in another post because it was definitely weird to not strength train for months.

But in THIS post, I want to share two things:

1. I am SO grateful to my wife Erin for being the supportive and growth oriented partner that she is. 🥰🙏❤️ 

She is now following her call to get a divinity degree and she’s already working in ministry as a Pastor in Training at an incredible, inclusive Presbyterian church here in Virginia. I am grateful to her for supporting me as I become more and more of who I am—and I’m enjoying watching her do the same! Love you, babe!

2. Second, I’m grateful to get to share who I am with my family. This summer we took a trip to Madden’s resort in MN to celebrate my parent’s 50th wedding anniversary. (It was actually their 52nd, because we had to postpone it twice due to Covid.)

I was nervous to be in the pools and lakes around them, but I could feel it was my only choice because I knew I wanted them to “know me”. And, how could that happen if I “hid me”?

Ultimately, I have to tell you…it was freeing to be me, as I am, who I am. 

I had the BEST time splashing around and biking and goofing around with my wife, niece, nephew, & sister. 🌊🏖🐟

So, I suppose, this is a gratitude post to thank those who have supported me over the years as I become more and more of who I am. 

Top of that list is my wife, Erin, but there are countless others. ❤️

If you’re reading this, thank YOU for being one of those people in my life too. I am deeply grateful. 🥹
.
.
#lgbtqfamily #nonbinary
How to set a boundary? 🤔 . . . . #lgbtqia #lgb How to set a boundary? 🤔 
.
.
.
.
#lgbtqia #lgbtqcommunity #emotionalhealth
What do you do if you’re telling a past story ab What do you do if you’re telling a past story about someone who has transitioned? 🤔 Share a 💯 if you agree ➡️🏳️‍⚧️🏳️‍🌈
7 things I got clarity on in 2022: 1. Good and b 7 things I got clarity on in 2022: 

1. Good and bad are labels. All things are experiences. 

2. Maturity is taking full responsibility for oneself. 

3. Having a loving, conscious relationship with myself is a core value. 

4. Emotions do not mean that anything has to be done. 

5. When I am in congruence with what I want, I have it. 

6. I have permission from myself to stop doing anything that doesn’t lead to my peace and empowerment. 

7. Stepping toward emotions and being able to feel them is a superpower. It determines the quality of my life. 

(Are there any above that you’d like me to further explain?)
 
Most importantly, which # above resonates with you? ⬆️

Happy New Year, y’all! 🎊🥳
.
.
.
.

#lgbtqcommunity #lgbtqiaplus #lgbtsupport #nonbinary #trans #selfgrowth
Interview with Jenny Nguyen, Founder of the Sports Interview with Jenny Nguyen, Founder of the Sports Bra—The World's 1st Bar to Only Play Women's Sports - shorturl.at/doGHZ

I'm excited to introduce you to today's #podcast guest, Jenny Nguyen, who is a professional chef, elite athlete, and entrepreneur.

I invited Jenny onto the podcast because she has done something extraordinary that is long overdue: She has opened up a sports bar that exclusively plays women's sports!

Despite extensive research, Jenny hasn't found another sports bar worldwide that ONLY plays women’s sports.

Given that it's nearly 2023, this is mind-blowing. As a lifelong athlete, I find her vision compelling and inspiring.

Aptly called the "The Sports Bra", the venue is putting Jenny's culinary skills on display alongside women's sports worldwide.

The Sports Bar has taken its mission a even further by partnering with and elevating other local, women-owned businesses.

Specifically, it:

1. Sources its grass-fed beef from @CarmanRanch, an ranch run by Cory Carman, a third gen rancher out of Wallowa, Oregon).

2. Sources its alcohol from Freeland Spirits, an all-women owned and operated distillery out of NW Portland.

3. Has furniture built by @girlsbuild_org, a non-profit organization headed by @ktmhughes in Portland, OR, that teaches carpentry and construction skills to young girls as a path to empowerment.

Since opening the Sports Bra this April, people have come from ALL over the U.S. and the world to experience it—including many professional female athletes.

To learn more about Jenny as she makes history, features women's sports, and elevates women-run businesses, listen to the episode here:

shorturl.at/doGHZ

Or, you can check out the Sports Bra at:

@thesportsbrapdx
TheSportsBraPDX.com/

Have you heard of the Sports Bra or been out to experience it in person?

#lgbtqiaplus #womenownedbusiness #lgbgtqia #lgbtqcommunity #womenssports #womeninsport
Over this recent holiday stretch, we… - enjoye Over this recent holiday stretch, we… 

- enjoyed some quiet time at home
- got a sauna delivered (but not yet installed)
- decorated for the holidays
- baked a bunch
- visited our favorite farm
- did some sight seeing
- and perhaps, most importantly, survived the cold snap along with our feather friends (who lived in the garage for a few days so we could heat them with a space heater) 🥶🐔

How have the holidays treated you…and did you get hit by the winter storms? ❤️🎁☃️❄️
Load More... Follow on Instagram

Recent Posts

Gender Spectrum

The Gender Spectrum: A Scientist Explains Why Gender Isn’t Binary

Laith Ashley

Transgender Model Laith Ashley: 11 Fascinating Facts

Real Estate Syndicators

Master List of Real Estate Syndicators for 2023

Pride Flags

Beyond the Rainbow: Your Ultimate Guide to Pride Flags

Nonbinary

What is Nonbinary Gender? On Being Both, Beyond, and In-Between

Categories

  • Biohacking
  • Confidence
  • Cryptocurrency
  • Entrepreneurship
  • Exclude
  • Finance
  • Fitness
  • Gold and Silver
  • Increasing Income
  • Investing
  • LGBTQ+
  • Nutrition
  • Podcast
  • Real Estate

Ask a Podcast Question | Contact Us | Terms of Use | Privacy Policy

COPYRIGHT © 2019 · CADEHILDRETH.COM | PHONE: ‪(202) 660-4705‬  | 800 CORPORATE DRIVE, SUITE 301, STAFFORD, VA 22554, USA

 

*Disclaimer: Nothing on this site should be construed as medical, health, or financial advice. Before making any health decisions, you should consult with your doctor. Before making any financial decisions, you should consult with professional adviser, such as a financial planner or CPA.