What is the Number One Rule of Real Estate?

What is the Number One Rule of Real Estate? An Expert’s Guide

If you asked ten agents, investors, or appraisers, “What is the number one rule of real estate?” half would respond with the old standby: “Location, location, location.” And they wouldn’t be wrong. But after a decade in the trenches buying, selling, managing, and advising on everything from starter condos to small apartment buildings, here’s what I’ve learned: location drives outcomes, but it doesn’t make your plan foolproof on its own. The buyers who win—consistently and with fewer sleepless nights—use a simple, practical rule that ties everything together.

In this guide, I’ll show you that rule, how to apply it step-by-step, and how to avoid the expensive mistakes I see all the time.

What you’ll get from this article:

• The classic “location” rule explained with modern nuance
• The practical rule I use with every client to protect your downside and set you up for long-term wins
• A hands-on framework for scoring a location (with data sources you can check today)
• Pricing and valuation tactics that keep you from overpaying
• How to match the property to your real-life goals (house-hack, flip, rental, dream home)
• Timing, financing, and offer strategies that give you leverage—even in a hot market
• A due diligence checklist so you don’t inherit expensive surprises

Let’s get right to it.

1) “Location, Location, Location” Still Rules

Everyone repeats the mantra, but most folks apply it at the wrong level. They evaluate “location” at the city level (“Austin is hot!”) or the zip code level (“90210 is expensive!”). That’s not how decisions are made on the ground. Most appraisal adjustments and buyer behavior hinge on micro-location.

Think of location in six layers:

1. Metro and job base
2. City/submarket
3. Neighborhood/school zone
4. Street and immediate block
5. Parcel position (corner, cul-de-sac, backing to a highway vs a greenbelt)
6. Unit position (for condos/townhomes: floor, exposure, view, noise)

A quick story from early in my career:

• Two seemingly identical three-bedroom homes went live the same weekend in neighboring subdivisions. Same builder, similar finishes, similar square footage.
• One was in School District A (rated 9/10), the other in District B (rated 6/10). They were a quarter mile apart, separated by a boundary line that you wouldn’t notice unless you checked the map.
• Result: The District A house had 12 offers and sold for 7% over asking. The District B house lingered and sold for 2% under.
• I had a first-time buyer who nearly wrote above-ask on the wrong one simply because it was staged better. The boundary line saved them $38,000 and probably a couple years of appreciation.

Micro-location drives:

• Who wants to live there (and who will pay a premium)
• The tenant pool if it becomes a rental
• Resale velocity (how quickly it sells and how wide the buyer pool is)
• Risk: flood zones, fire zones, insurance costs, environmental issues
• Carrying costs: taxes, HOA or condo fees, special assessments

What I look for in a location today:

• Proximity to durable employers (hospitals, universities, government hubs, logistics corridors)
• Future development pipeline (transit extensions, mixed-use projects, rezoning that adds walkability)
• Regulatory environment (ADU-friendly? STR restrictions? Rent control? Permit timelines?)
• Insurance and climate risk (flood, fire, wind; historical claims in the area; insurer withdrawals)
• School zones and boundary nuance, even for buyers without kids (because future buyers will care)
• Daily friction: commute times, noise, parking, street lighting, curb appeal, access to essentials

Pro tip: Walk the block at different times—morning commute, after school, evening, and weekend nights. Listen and look. You’ll learn more in four walks than from a month of online browsing.

2) Buy the right property at the right price for your plan.

“Location” gets all the quotes on Instagram, but the rule that actually keeps you safe is this:

Buy the right property at the right price for your plan.

That’s the rule I use on every deal. It forces you to:

• Clarify your plan (live-in for 5–7 years? flip in 6 months? hold for 10+ years? house-hack for 2 years then convert to a rental?)
• Choose the right property for that plan (layout, condition, zoning, rentability, maintenance burden)
• Lock in the right price relative to your plan’s success metrics (monthly payment, NOI, cash-on-cash, exit comps)

I call it the 3P Rule:

• Property: Will this specific property do the job my plan requires?
• Price: Does the price protect me if things go sideways?
• Plan: Is my plan realistic given my skills, timeline, and risk tolerance?

Let’s make it practical with a few examples:

Example 1: The house-hacker

• Plan: Live in a 3-bed home, rent two rooms to travelling nurses, move out in 2 years and keep it as a rental.
• Right property: Near a major hospital cluster, safe to walk at night, parking for three cars, a layout that separates bedrooms, and a bathroom ratio that works for roommates. Preferably a basement or ADU potential.
• Right price: Rents must cover at least PITI (principal, interest, taxes, insurance) after you move out, with a 5–10% maintenance and vacancy reserve baked in.
• Outcome: One of my clients did this three times in six years. Result: two fully rented homes producing strong cash flow, and a third they live in with a below-market effective payment.

Example 2 : The long-term rental buyer

• Plan: Buy a duplex, 10-year hold, target 8–10% cash-on-cash.
• Right property: Separate utilities, low deferred maintenance, rents below market with value-add path (adding laundry, fencing, new kitchens/baths), zoning allows extra unit or ADU later.
• Right price: After realistic pro-forma (not magic numbers), the stabilized cap rate should exceed your financing cost with a comfortable spread.
• Outcome: I’ve purchased duplexes like this where simply moving rents to market and adding in-unit laundry moved cap rates from 5.3% (at purchase) to 7.1% within 18 months.

3rd Example: The “forever home” buyer

• Plan: 10+ year horizon, family growth, work-from-home.
• Right property: Office space, flexible floor plan, good light, quiet street, schools, parks, and a commute that won’t grind you down. Not maxed out for the neighborhood so you can improve it over time.
• Right price: Focus on total cost of ownership, not just mortgage—taxes, insurance, utilities, maintenance, and likely upgrades over the first 5 years. Make sure it’s comfortable at today’s payment, not just at a hoped-for refinance.

Why this rule never fails:

• It prevents overbuying in the wrong area just because prices are low.
• It keeps you from overpaying in a hot area when the numbers don’t support your plan.
• It forces discipline. A home is emotional. A plan is not. Keeping those in balance is the difference between a good decision and a regret.

3) Score a Location Like a Pro: A Practical, Data-Driven Checklist

You don’t need to be a full-time analyst to get location right. Use a simple scoring model. I usually rate each category 1–10, then add context from boots-on-the-ground observations.

Use this checklist:

• Jobs and wages: How diversified is local employment? Are there durable anchors (hospitals, universities, government)? Look at BLS data and local economic development sites.
• Transit and access: Commute times to job centers, highway access, public transit, bikeability. Try Google Maps at rush hour, not on Sunday morning.
• Schools: Public school ratings, boundary lines, magnet programs. Check school district maps and talk to parents at the park.
• Safety and stability: Trends in crime, code enforcement, and neighborhood investment. Look at local police dashboards and city council agendas for planned improvements.
• Amenities and walkability: Parks, groceries, cafes, fitness, clinics, libraries. Walk Score is a start; your own feet are better.
• Regulatory risk: For landlords, check rental registration, inspection requirements, rent control talk, and STR rules. For homeowners, look at HOA strength and reserve studies for condos.
• Supply pipeline: Are thousands of new units coming soon? Will a new road transform access? Check planning commission documents and building permits issued.
• Insurance and climate: Is this flood/fire/wind prone? What are current premiums and deductibles? Any insurer pullouts? Look at FEMA maps and speak with a local broker.
• Price trend resilience: How did this submarket perform during prior downturns? Look at price-to-income ratios and days on market history.
• Rentability: Vacancies, rent growth, tenant profile, rent-to-price ratio. Check Apartments.com, Zillow, and local property management reports.

Practical Observations

I’ll often add a notes section with real-world observations:

• Street noise at 7 AM
• Overnight parking behavior
• Dog walkers and strollers at dusk (signals)
• New construction quality and absorption nearby
• Informal land uses (a garage that’s actually an event space, etc.)

Two personal examples that illustrate score differences:

Example A: The hospital-adjacent house hack

• Two homes 0.7 miles from a major hospital cluster. One was on a quiet side street with easy parking and fenced yards. The other fronted a busier artery and had limited street parking during shift changes.
• On my scoring sheet, both areas rated highly for jobs and amenities. But the quiet street had a 9 for rentability, and the busy street a 6. We chose the quiet street. Two rooms were rented within 10 days at top-of-market rates, and the new owner’s net monthly payment dropped by 42%.

Example B: The beach condo vs. the inland townhouse

• A client loved a beach-area condo with a “wow” view. Insurance premiums and HOA assessments were ballooning due to new standards and deferred maintenance.
• An inland townhouse, 12 minutes from the beach, had stable HOAs and significantly lower insurance. Similar purchase price.
• On my sheet, the beach area scored 10 for amenities and 6 for regulatory/insurance risk. The inland area scored 8 and 9, respectively. The client chose inland, and six months later the beach building announced a special assessment equal to 1.5% of unit values. Bullet dodged.

Sources worth bookmarking:

• City or county GIS maps (zoning, flood, parcel data)
• Comprehensive plan and planning commission minutes
• School district boundary maps
• Police or city data dashboards
• State DOT project maps
• Insurance broker quotes for the exact address (not estimates)

4) Nail the Price: Valuation and Negotiation Tactics That Protect Your Downside

If the property fits your plan and the location scores well, the next guardrail is price. Here’s how I approach it for primary homes and investment properties.

For primary homes

• Comparable Sales (CMA): Find 3–6 recent sales within a half-mile and within 10–15% of square footage, similar age and style. Adjust for bed/bath count, garage, lot, condition, and micro-location quirks (school line, busy street, backing to power lines).
• Appraisal-minded: Think like an appraiser, because if you’re using financing, the appraiser has veto power. They’ll heavily weight the most similar, most recent comps.
• Total Cost of Ownership (TCO): Don’t just ask, “Can I afford the payment?” Add property taxes, insurance (get an actual quote, not a generic number), utilities, HOA/condo fees, maintenance (1–2% of home value per year is a good rule of thumb), and expected upgrades in the first 3 years.
• Payment sensitivity: Model payments at the current rate, a slightly higher rate, and a lower rate in case you can refinance. Make sure you’re comfortable at the current number.

A homeowner pricing example:

Description	Amount
Purchase Price	$560,000
Down Payment (10%)	$56,000
Interest Rate	6.75% (30-year fixed)
Principal & Interest (P&I)	~$3,262 / month
Taxes	$650 / month
Insurance	$175 / month
HOA	$0 / month
Taxes + Insurance + HOA	$825 / month
Total Monthly (P&I + T/I/HOA)	~$4,087 / month
Maintenance Reserve (1%/yr)	~$467 / month
Real Monthly Obligation	~$4,554 / month

If that number makes you clench, the house is not “right priced” for your plan. Better to be honest now than stuck later.

Negotiation ideas for primary buyers:

• Inspection leverage: Ask for repair credits on big-ticket items uncovered in inspection (roof near end of life, aging HVAC, sewer line). Money off beats a seller promising to “fix.”
• Seller credits vs. price: A $10,000 closing credit might be more valuable than a $10,000 price cut if it helps you buy down the rate or cover out-of-pocket expenses.
• Offer hygiene: Clean, clear terms. Short contingency periods (only if you can meet them), realistic earnest money, proof of funds and pre-approval ready to go. Use an escalation clause carefully, with a cap you’d be happy to pay.

A quick negotiation win from my files:

• List price: $485,000, multiple offers. We offered $492,500 with a $12,500 inspection credit contingent on the results.
• Inspection revealed past water intrusion and a 17-year-old roof. We kept the price, leaned on the report, and secured the $12,500 credit. Effective price: $480,000. The seller kept face, the buyer won on net and used funds to address issues properly.

For investment properties

Investors need to protect the downside with cold numbers.

Key metrics:

• Gross rent and realistic vacancy: No rosy assumptions. If the local vacancy is 6%, use at least 5% in your model.
• Operating expenses: If you don’t know, assume 35–45% of gross for small properties (not including debt service). Get actuals whenever possible.
• Net Operating Income (NOI): Gross rents minus operating expenses.
• Cap rate: NOI divided by purchase price. Compare against area norms and your financing cost.
• Debt Service Coverage Ratio (DSCR): NOI divided by annual debt service. Aim for at least 1.25 for safety on small residential investments.
• Cash-on-cash: Annual pre-tax cash flow divided by total cash invested.

Simple example:

• Duplex purchase price: $630,000
• Rents: $2,100 + $2,000 = $4,100/month
• Vacancy at 5%: $205/month
• Expenses (tax, insurance, water, maintenance, management): $1,350/month
• NOI: ($4,100 – $205 – $1,350) = $2,545/month or ~$30,540/year
• Cap rate: $30,540 / $630,000 = 4.85%
• 25% down payment: $157,500 + closing/repairs ($15k) = $172,500 invested
• Debt service (assume 6.75%): ~$3,275/month or ~$39,300/year
• Cash flow: NOI – debt = ~$30,540 – $39,300 = -$8,760/year (negative)
  Not a good buy unless there’s a clear upside to rents or expenses. Many new investors skip this step, hoping appreciation saves them. Hope is not a plan.

When the numbers do work:

• Same duplex but at $560,000 or with post-renovation rents at $2,450 each changes the picture dramatically. Price and plan, together, either create or erase your margin of safety.

Valuation and negotiation ideas for investors:

• Prove the upside: Bring rent comps and a realistic renovation budget to justify your price.
• Focus on hidden costs: Shared utilities, old sewer lines, or out-of-code electrical can erode returns. Use inspection to price in these risks.
• Seller financing: In tougher markets, ask about owner-carry. A 5% note from the seller can beat bank debt and improve DSCR.
• Ask for actuals: Last 12 months of operating statements, leases, utility bills, and any vendor contracts. If it’s not documented, it didn’t happen.

5) Match the Property to Your Strategy

Great deals die when good properties meet the wrong plan. Here’s how I align strategy with property characteristics.

If you’re buying a first home

What helps:

• Flexible layout: A den or extra bedroom for work-from-home or a future nursery.
• Manageable maintenance: Avoid quirky systems or aging roofs if you’re not handy or cash-rich.
• Resale safety: Even if this is “forever,” choose a floor plan and location that are easy to sell later (most buyers prefer 3+ bedrooms, 2+ baths, parking, and a quiet street).

What hurts:

• Ultra-unique floor plans that only make sense for you
• Being the nicest house on the block (limited appreciation)
• A price that pushes your budget to the edge at current rates

Anecdote:

• A client fell for a mid-century stunner with major structural work looming. It was romantic, but their budget didn’t support the risks. We found a slightly less dramatic home with a flexible floor plan, a newer roof, and space to add character over time. They’ve since renovated the kitchen and added $80k in equity—on their terms.

If you’re house-hacking

What helps:

• Separate entrances or bedroom wings
• Parking for tenants without sacrificing your own quality of life
• Close to employers, transit, or campuses
• Sound attenuation (solid doors, strategic rugs, maybe a white noise machine)

What hurts:

• HOAs that ban rentals or enforce owner-occupancy in ways that hinder your plan
• Tiny common spaces that become friction points
• Overestimating rents; underestimate and be pleasantly surprised instead

My favorite house hack:

• Small 3-bed near a medical center. We added coded locks to bedroom doors, provided fast Wi-Fi, comfy shared space, and set clear house rules. The owner lived nearly free for two years, then moved out and kept it as a long-term rental with minimal turnover.

If you’re flipping

What helps:

• Cosmetic problems in otherwise good bones
• Micro-markets with strong comps and low DOM (days on market)
• Permits not required for most of your scope (paint, floors, kitchens/baths without moving walls)

What hurts:

• Structural issues, wet basements, additions built without permits
• Markets with inventory piling up or buyer incentives returning
• Projects you can’t complete in 90–120 days; holding costs eat returns

True story:

• My roughest flip taught me a lifelong lesson: a beautiful block with a hidden water problem. We found a buried downspout directing water toward the foundation and a neighbor’s yard grading that made things worse. A $6,000 drainage fix saved the project; without it, we would’ve taken a bath (pun intended).

If you’re buying a long-term rental

What helps:

• Simple systems, separate utilities, durable finishes
• Renter-friendly layouts (in-unit laundry if possible)
• Near stable employers and transit

What hurts:

• Fancy finishes that cost extra to maintain
• HOA volatility or condo rules that can change rental policies
• Underwriting with aggressive rent growth assumptions

If you’re considering short-term or mid-term rentals

What helps:

• Close to unique draws: hospitals (for mid-term), event venues, parks, waterfronts
• Local rules that are stable (permits, caps, taxes understood)
• A backup plan to convert to long-term if rules change

What hurts:

• Buying, assuming perpetual peak tourism or zero regulation change
• Ignoring cleaning/turnover costs and management overhead
• Not having reserves for off-season months

Bottom line: Choose the property and the plan together. If the fit is awkward now, it’ll be painful later.

6) Timing, Financing, and Smart Contract Terms

You can’t control the broader market, but you can control how you time, finance, and structure your offer.

Timing: Seasonality and cycles

• Seasonality: In many markets, spring has more listings and more competition; late fall can be quieter with motivated sellers. If you can shop during quieter months, your negotiating power increases.
• Micro-cycles: Watch local inventory trends, price reduction rates, and days on market. An uptick in price cuts is a sign to negotiate harder.
• Rates: Don’t try to perfectly time rate drops. Instead, buy when the property, price, and plan align—and structure financing with optionality to refinance if conditions improve.

Metrics to track:

• Active listings vs. pending sales
• Median days on market
• Percentage of listings with price cuts
• Showing activity reports (some MLSs provide them)

Financing: Make the money work for your plan

Options to consider:

• Conventional loans: Solid for primary homes and 1–4 unit investments with good credit.
• FHA: Lower down payments; great for house-hacking duplexes, triplexes, and fourplexes. The 203(k) rehab loan can fund renovations.
• VA/USDA: Powerful options if you qualify, with potential for zero down.
• ARM vs. fixed: If you plan to sell or refinance within 5–7 years, a well-priced ARM can make sense. If you want long-term certainty, fixed is king.
• Points and buydowns: Paying points can make sense if you’ll hold long enough to break even. Temporary buydowns (2-1, 1-0) can ease the first years’ payments—especially helpful if sellers will fund them.
• Portfolio and DSCR loans: For investors, these can underwrite to the property’s income rather than your W-2. Rates are typically higher; run the DSCR math carefully.

My rules of thumb:

• Don’t eat up reserves to chase a lower rate. Cash is insurance.
• If you buy points, calculate the breakeven period and only pay if you’re likely to stay past it.
• Use seller credits strategically—they are often more powerful than a small price cut.

Offer structure: Win without overpaying

• Clean contingencies: Keep inspection and financing, but set clear timelines and communicate proactively. If you move fast, sellers feel safer.
• Appraisal gap strategies: Only if you’ve seen enough comps to justify it and you have the cash cushion. Otherwise, avoid promising what you can’t deliver.
• Escalation clauses: Use with a cap that truly is your walk-away number. Ask for proof of the next-best offer.
• Rent-backs: Offering the seller up to 60 days of post-closing occupancy (with holdbacks and agreements) can tip the scales in your favor at minimal cost.

Personal note:

• One of my favorite wins wasn’t the highest price; it was the smoothest path. We offered a flexible closing date, a short inspection period with pre-scheduled inspectors, and a seller rent-back at market rate. We won against a slightly higher offer because the seller was relocating and needed certainty.

7) Due Diligence and Risk Management

This is where deals are made or saved. Due diligence is your safety net. Here’s the checklist I use.

Inspections

• General home inspection: Identifies obvious issues. It’s the starting point, not the finish line.
• Sewer scope: Particularly for older homes or big trees. A cracked clay line can cost $5k–$15k.
• Roof and attic: Assess remaining life and ventilation.
• HVAC: Age, service history, and type (heat pumps vs. older systems).
• Electrical: Panels, aluminium wiring, knob-and-tube, GFCI/AFI protection.
• Foundation/structural: If you see cracks, doors sticking, or sloping floors, bring a structural engineer.
• Radon, mould, pests: Depending on region. Don’t skip if they’re common locally.
• For condos/HOAs: Review the reserve study, budget, meeting minutes, special assessments, litigation, and owner-occupancy ratios.

If the report looks scary, remember two things:

1. Houses always have issues—prioritize structural and water.
2. Use the report to get price credits that reflect real costs, not cosmetic nitpicks.

Title, boundaries, and legal

• Title search: Liens, easements, encroachments. Understand shared driveways and utility easements.
• Survey: For fences, sheds, and any future expansion plans. Avoid future neighbor wars.
• Zoning and permits: If there are additions, verify permits. Unpermitted work is a negotiation lever and a safety concern.

Insurance and climate risk

• Obtain quotes during inspection. Ask about coverage limits and exclusions.
• Understand deductibles: Wind/hail deductibles can be a percentage of the dwelling coverage. Big storms can mean big out-of-pocket costs.
• Flood zones: Don’t assume it’s fine because it “never floods.” If a map says it’s high-risk, get the facts and price it in.

A lesson I learned the hard way:

• An otherwise perfect property sat on the edge of a revised flood map. The seller had a pre-map policy, so their premium was low. The buyer (my client) would have been subject to the new rates—4x higher. We renegotiated or walked. We walked. A month later, the deal fell apart with the next buyer for the same reason.

Renovation planning: Scope, permits, and ROI

• Scope creep is the enemy: Split projects into must-haves (safety, leaks, systems) and nice-to-haves (backsplash, landscaping).
• Permits: If it needs a permit, get it. It protects resale and insurance claims.
• Typical ROI ranges (very rough and market-dependent):
  • Minor kitchen refresh: 60–85%
  • Minor bath upgrade: 60–80%
  • New floors/paint: 70–100% (and the fastest way to improve feel)
  • Curb appeal (door, lights, plants): 80–120% in many cases
  • Full gut or moving walls: only if comps support it and you can execute cleanly
• Timeline management: Pad your estimate by 25%. Labor and materials rarely move in perfect sync.

Property management and long-term maintenance

• For rentals: Decide early if you’ll self-manage or hire a pro. Screen tenants thoroughly and legally. Document everything.
• Create a maintenance calendar: Seasonal HVAC service, gutter cleaning, roof checks, caulking, and pest prevention.
• Reserve accounts: For rentals, keep at least 6 months of expenses in reserve. For homeowners, aim for 3–6 months of total housing costs plus an annual maintenance set-aside.

Exit strategies:

• If you’re investing, identify at least two exits: sell, refinance, convert to a different rental model, or add units (ADU).
• For homeowners, plan for life changes: Will this still work if your job moves or your family grows?

I know this is the unglamorous part, but it’s where most “great deals” are protected or salvaged. Being boring saves you money.

Bringing It All Together

Location still matters. It always will. But the answer to “What is the number one rule of real estate?” is this: buy the right property at the right price for your plan. That rule adds discipline to your search, pressure-tests your assumptions, and keeps you from letting emotions or hype make the decision for you.

A quick recap you can screenshot:

• Define your plan first: how long you’ll hold, how you’ll use it, and your true budget.
• Score the location at the micro level: schools, jobs, transit, regulatory risk, insurance, and rentability.
• Run the numbers: TCO for homeowners; NOI, cap rate, DSCR, and cash-on-cash for investors.
• Match the property to the plan: layout, maintenance, zoning, and exit options.
• Structure smart financing and offers: keep reserves, buy points only if they pay back, and win with clean terms rather than reckless numbers.
• Do thorough due diligence: inspections, title, insurance, and HOA health if applicable.
• Keep options open: have at least one fallback plan.

Action step:

• If you’re shopping now, write down your plan in one sentence. Then make a two-column list: “Must-haves for my plan” and “Nice-to-haves.” Bring that list to every showing. If the property can’t do the job your plan demands, keep walking.

If you remember nothing else, remember this: your plan is the lens. The right property, at the right price, for that plan—that’s how you make decisions you’ll be proud of five and ten years from now. And if you want a sanity check on a deal you’re considering, share the basics—price, address, and your plan.

Frequently Asked Questions (FAQs)

1. Is location really more important than price?

They’re inseparable. A great location at a reckless price is risky. A weak location at a “deal” price can be a value trap. Use both together and filter every decision through your plan.

2. How can I evaluate a neighborhood I don’t know well?

Walk it at different times. Talk to neighbors. Check school boundaries, crime trends, and zoning maps. Look for evidence of pride of ownership (landscaping, upkeep) and planned city investments. Score it using the checklist above.

3. What if the ideal area is out of my budget?

Consider adjacency. The “next” neighborhood often follows the lead area. Just make sure the fundamentals are trending positively (new cafes, transit plans, lower vacancy). Or buy a smaller/better-located place you can improve over time.

4. What hidden costs do buyers forget to budget for?

For homeowners: window replacements, HVAC age, roof life, sewer lines, and insurance deductibles. For investors: turnover costs, leasing fees, utility spikes, city rental registration fees, and HOA special assessments.

5. How many months of reserves should I hold?

Homeowners: 3–6 months of total housing costs plus an annual maintenance set-aside. Investors: 6 months of operating expenses and debt service per property. More if the property is older or has unique systems.

6. How do I negotiate without losing the deal?

Lead with clean terms and realistic timelines. Use inspection findings for targeted credits. Consider seller credits for rate buydowns. Communicate clearly and professionally; sellers choose the path of least risk, not just the highest number.

7. What metrics should I track after closing on a rental?

Monthly: rent collected, vacancy, and operating expenses. Quarterly: maintenance and capital expenditures. Annually: NOI, DSCR, cash-on-cash, rent-to-income for your tenant base, and local policy changes that could affect rents or operations.