Is Your Rental Property REALLY Making You Money or Just Breaking Even?

Introduction

If you watched the recent breakdown by Bud Evans, you already know there are smarter ways to start building income with a rental property. In this article, you'll get a clear, practical plan to save thousands on your first deal — without cutting corners. Read this as if I'm standing next to you, walking through every decision from offer to lease-up.

Why the Buy Matters Most

The profit is in the buy, not in the sale. That line isn't just catchy — it's how you win. If you pay full list and finance at market rates, you're already starting behind. Instead, focus on finding motivated sellers, off-market deals, or properties that need light cosmetic work rather than full gut rehabs.

Finding the Right Deals

How do you find these deals? Here are some tips:

• Scan listings for distress keywords like "AS IS," "needs TLC," "motivated seller," or "bring all offers."

• Move fast: run numbers quickly, present clean offers, and negotiate with data, not emotion.

• Be the most certain buyer in the room — clarity and speed beat aggression.

  
  

Creative Financing That Preserves Cash Flow

High interest rates don't have to kill your deal if you structure terms smartly. You may not control the market rate, but you control the financing terms.

Smart Financing Options

Consider these options:

• Ask for seller financing with below-market interest where possible.

• Negotiate a rate buydown or closing credit to offset points and fees.

• Explore portfolio lenders or DSCR loans that underwrite based on the property's performance rather than just your personal income.

• Bring in a private lender from your network for a secured, faster solution.

• If you're a veteran, consider a VA loan and house-hacking to lower your cash needs and boost early cash flow.

  
  

Renovate with a Plan — Protect the Asset First

Don't pick up a hammer before you build a scope of work. Walk the property with a contractor and separate essential repairs from cosmetic upgrades.

Prioritizing Repairs

Here’s how to prioritize:

• Priority repairs: roof, foundation, windows, plumbing, electrical, HVAC, and other safety items. These protect insurance and compliance.

• Value-add upgrades: LVP flooring, LED lighting, and durable finishes that reduce maintenance and raise rents.

• Price-shop contractors and organize bids and timelines with a project-management tool built for investors — that will keep your rehab on budget and on schedule.

  
  

Build Systems Before You Scale

Even a single rental can become chaotic without repeatable processes. Whether you self-manage or hire a manager, set up these four systems before rent hits your account:

Essential Management Systems

1. Leasing and Screening: Create listing templates, move-in inspections, and a documented screening policy.

2. Rent Collection: Establish who follows up on late rent and the escalation steps you use.

3. Maintenance Requests: Define how requests are submitted, prioritized, and approved (including spend limits).

4. Tenant Communication: Set up tenant touchpoints, response time expectations, and document storage.

   
   

Start simple with spreadsheets and email, but design everything as if you plan to manage 10 doors eventually. Systems beat panic.

Budget for the Things That Quietly Eat Profit

New investors often budget mortgage and taxes but forget recurring and one-off drains that reduce NOI.

Hidden Costs to Consider

• Reserve at least 8–10% of collected rent for maintenance and capital expenses combined.

• Plan for 5% vacancy even in strong markets.

• Keep property reserves to cover a minimum of three months of expenses (six months preferred).

• Account for insurance increases, municipal fees, and tax bumps after renovations.

• Know local compliance items — rental licenses, annual inspections, lead-safe certifications, chimney/roof certifications — they can surprise you with costs if not planned for.

  
  

Quick Recap: Five Ways to Save on Your First Rental Property

1. Win on the buy — don't pay retail; be the most certain buyer.

2. Use creative financing — seller terms, private money, DSCR, or VA loans and house hacks.

3. Renovate with a prioritized scope — repair what protects, upgrade what earns.

4. Build management systems — leasing, collections, maintenance, communications.

5. Budget for hidden costs — maintenance, capex, vacancy, insurance, and compliance.

   
   

Next Steps and a Free Checklist

If you want a step-by-step checklist that takes you from offer to renovation to post-close systems, I put one together to help you evaluate every deal consistently. You can get that checklist and a free strategy session at budevans.com — I’ll walk you through how to set up your foundation so you don’t burn out or lose track of your numbers.

Final Thought

A rental property can be a reliable path to cash flow if you act like an operator, not a dreamer. Focus on buying well, structuring smart financing, renovating to improve NOI, building systems, and budgeting for the things that sneak up on you. Aim high, execute fast, and turn that first rental into a real, sustainable income stream.

Call to Action

Ready to dive deeper into real estate investing? Check out our channel at youtube.com/@enlisted2entrepreneur for more tips and strategies to help you succeed!