The Ultimate Real Estate Investor’s Checklist: How to Purchase, Manage, and Sell Properties

(If the list starts to feel overwhelming, skip ahead to the end where we explore new investment models to simplify the process!)

The Real Estate Investor’s Planning Checklist

• Establish your resources. Make a list of how much time, money, energy, and industry knowledge you have for this venture. Does it make sense to partner with another investor whose resources complement your own? If so, do you have connections? This is a good time to meet with a lender to discuss options for financing your investment.

• Define your goals. Are you looking for strong cash flows or appreciation? Do you want a long-term investment or something short-term? Get clear on what you want to get out of your investment.

• Choose a strategy based on your resources and goals. There are so many different ways to invest in real estate. If financial resources are limited, for example, you might focus on house hacking. If you have some real estate knowledge and are looking to build a portfolio quickly, you might consider the BRRRR method. Take a little time to explore different real estate investment strategies.

The Real Estate Investor’s New Acquisition Checklist

• Scout cities and neighborhoods. Location, location, location. Property values are dramatically affected by the neighborhood, so it makes sense to narrow your search to neighborhoods that are performing well in terms of rental rate growth and/or appreciation. If your local markets are underperforming, consider investing out of state. You may need more professional assistance from property managers and contractors, but the hottest real estate markets can generate enough income to offset the cost of hiring pros.    

• Choose a real estate agent. Real estate agents are instrumental in helping investors find suitable properties and negotiate fair terms. Agents often learn of new opportunities before they hit the market, so a well-connected agent can give you a competitive edge over other buyer-investors.  

• Search for individual properties that align with your goals. Don’t be afraid to look beyond the active market. Good deals are often found off-market, through sources like auctions, pre-foreclosures, and expired listings. 

• Crunch the numbers. When you find a property that could work, calculate important real estate investing metrics, like ROI (return on investment) and ARV (after-repair value). Make sure you’re using realistic numbers based on current market conditions. For example, if you’ll be renting out the property, research current rental rates for comparable units in your market. 

• Make an offer. If the numbers work out, make an offer on the property. Your real estate agent can help you determine the offer price and terms based on local market conditions. The seller might accept your offer, decline the offer, or counter with an offer of their own. Don’t get discouraged if it takes a few tries to get an accepted offer.  

• Conduct more due diligence during the contract period. Once the property is under contract, you have the opportunity to take a closer look to make sure the property is as expected. Your due diligence should typically include an inspection by a licensed property inspector to determine the condition of the property, an appraisal to determine the current fair market value, and a title check to make sure there are no other claims against the property. You may also want to have a survey done or get an environmental impact report, depending on the specifics of your project.       

• Secure funding and insurance. The contract period also gives you a chance to get any financing needed to close the deal and line up the insurance needed to protect your new asset. 

• Close on your new property. If the property passes your intense scrutiny, and the funding is obtained as planned, you’re ready to close the deal and become the new owner of the investment property! 

The Real Estate Investor’s Property Management Checklist

The New Development/Value-Add Checklist

• Hire your team. Depending on the scope of your project, you may need architects, designers, contractors, and builders. Even if you plan to do much of the work yourself, you may still need the help of professionals like plumbers, electricians, and painters. 

• Apply for the necessary permits. Permits can potentially take weeks or even months to be approved, so apply for them as soon as possible.

• Demo and prep the site. If you’re building from the ground up, tear down any structure that will be in the way of your new development, and grade the lot as needed. If you’re renovating, demo the necessary parts of the existing structure. 

• Order materials. With supply shortages, you may want to order building materials and fixtures early to make sure they arrive in time. 

• Oversee renovations or construction. Supervise your workers to keep the project on time and on budget.

• Get the property show ready. Add the finishing touches, clear any remaining debris, and clean the property so it shines. 

The Rental Management Checklist

• Market the unit(s) for rent. To attract qualified renters, you need to advertise the units. Online marketplaces are a good place to start. You can also promote the property on your social media platforms.

• Screen prospective tenants. Properly screening tenants can help ensure your new renters are financially qualified and can be relied on to take good care of the property. 

• Draft leases. Local landlord associations may have templates you can use.

• Coordinate lease signings and move-ins. The sooner you get tenants moved in, the sooner your cash flow begins.

• Collect deposits and rents. It’s your job to keep the renters’ deposit safe so it’s available to return upon move-out. You also get to collect monthly rents (sometimes sending reminders when payments are late).

• Conduct move-in inspections. Walk the unit with your new tenants to document any defects.

• Properly maintain the property. Proper maintenance means responding promptly to any tenant requests for repairs as well as organizing preventative maintenance to keep the structure’s systems running smoothly and protect your investment. 

• Plan resident retention measures. If you want your residents to renew their leases, you need to give them a good experience in your building. Small gifts at move-in and during the holidays can help them feel appreciated. If your property is multi-family, hosting community events where the residents can get to know each other. 

• Address tenant issues as received. Noise complaints, parking problems, and stolen packages are often reported to the landlord. 

• Negotiate lease renewals. Determine how much the renewal rental rates will be. You may offer shorter renewal terms at higher rates to give tenants more options.

• Conduct move-out inspections. Walk the unit upon move-out to see if it sustained any damage beyond normal wear and tear.

• Turn units between renters. You’ll probably need to paint and deep clean to prepare the unit for the next tenant.

• Return deposits as appropriate. Deposit rules vary by state, but you can often withhold some of the deposit to cover the cost of cleaning, painting, and repairs as needed.

• Handle any necessary collections and/or evictions. While most renters pay rent on time each month, you may have a renter who fails to pay at some point. In this case, you may have to evict or offer cash for keys. If a tenant’s deposit does not cover back rent or damages, you may have to turn the tenant over to collections. 

The Real Estate Investor’s Checklist for Selling a Property

• Plan your exit. Decide when it makes sense to sell. 

• Choose a real estate agent. You might work with the same agent who helped you purchase the property, or you might choose an agent who specializes in listing properties rather than working with buyers.  

• Prep the property for market. You might make minor repairs, complete cosmetic updates, or even stage the property to help it appeal to buyers. 

• Make the property accessible for showings. If the property is tenant-occupied, you may be limited by local landlord-tenant law regarding how and when the property can be shown. Ask your real estate agent for guidance.

• Review and evaluate offers. When you receive an offer, pay attention to terms and financing as well as the offer price. For example, a cash buyer looking for a quick close may be a better bet, even at a slightly lower offer price because they are more likely to close than a less qualified buyer.

• Negotiate the sales agreement. Your agent can help you decide if a counteroffer is advisable. 

• Navigate the contract period. During the contract period, you may need to make the property available for inspections. You might also need to reopen negotiations, depending on the results of the inspection and appraisal.

• Close on the sale. With the details hammered out, you’re ready to close, collect your proceeds, and find your next investment!

How to Simplify the Real Estate Investment Process