How to Buy a Rental Property in 2025 (6 Beginner Steps)

In this episode, we’re explaining exactly how to buy a rental property in 2025How do you buy a rental property that’s profitable, doesn’t take on too much risk and helps you on your path to long-term financial freedom? Yes, it is still possible and today I’m going to give you my step-by-step guide. Hey everyone, it’s Dave Meyer. I’ve been buying rental properties and investing in real estate for 15 years now, and although some things have changed over those 15 years, the basic process of identifying and buying great rental properties hasn’t actually changed that much. So in today’s episode, I’m going to share with you the basics, but also how to adapt this basic buying framework to current market conditions, given that there’s a lot of economic uncertainty right now and it’s in your best interest to take those current market conditions and apply it to the tried and true framework that we’re going to be talking about. So even if you’ve already bought before and this isn’t your first deal, the step-by-step guide we’re going to go over today is going to be a great resource for anyone who wants to buy really high quality, low risk investments in 2025.Let’s get to it. Okay, so step one in buying a rental property, this is in 2025 or really anywhere, is actually just to take a step back and think about strategy. And I know in real estate investing people call things like rental properties, a strategy, short-term rentals, a strategy, flipping a strategy, and those are part of your overall strategy. But I think the most important part of any strategy is to figure out what your goals are. Actually the definition of strategy is a plan to achieve a specific outcome or a specific goal, and so until you know what that specific goal is, you can’t really figure out the tactics and the step-by-step directions that you need to take to get there. So I always recommend with everyone, whether you’re starting or just scaling your portfolio, figuring out what your goals are is the number one thing that you have to do.It also I think, happens to be the number one thing that everyone seems to skip over. People just jump right into buying properties, which can still work out sometimes, but I think if you want to be intentional and especially given what’s going on in the market right now, if you want to get really good properties with relatively low risk, figuring out your goals is highly important when you’re doing this. There’s different ways to do it, but I like to think about a couple of different variables that I’ll throw out there, but you should think about these things and maybe actually even go and write these down. You might benefit from just putting ’em on paper so that when you go and build your buy box, which will be talking about a little bit later, you can remember the exact goals that you are trying to accomplish.So the first thing is think about the mix of returns that you want. If you listen to the show, you’ve probably heard that real estate offers returns in all sorts of ways, so you can earn cashflow, you can get appreciation, you can get amortization. There are tax benefits which are important to you, and despite the fact that this just continues to be a debate in our industry, there is no right answer. Cashflow is not the only way to make money. Appreciation isn’t the only way to build wealth. It’s really up to you. For example, when I first started, I was mostly focused on cashflow. Then when I got further into my career, I have focused more on appreciation, but I think in the next five to 10 years I’ll probably start shifting back towards cashflow so I can actually plan out my retirement. I also prioritize tax advantages.Think about these things and you’re probably thinking, oh, all of them are good. I want ’em all. That’s also sort of okay, you’re not going to get great cashflow and great appreciation on every deal, but if you’re open to just really whatever the best deal you can find is, that’s okay too. That’s an okay goal is just to say I want the best overall return possible. Personally, that’s kind of how I think about my investing right now at this point in my investing career. Another way to think about this too, especially if you are trying to work backwards towards a longer portfolio level strategy is what your financial goal is, like a specific number, and again, this is another thing people skip over, but if you know the exact amount of dollars you want at the end of your investing career, it’s really helpful to sort of work backwards from that point.You don’t need to do that if you’re just buying your first property, but at some point in your investing career, that will be really important. And then the third variable to think about in your goals is how much time do you want to spend on this rental property that you’re about to buy? There is a spectrum in real estate investing of how much effort you need to put into different things. You can buy a really nice, let’s call it a new build that is in a great neighborhood. It’s going to rent out quickly and you don’t have to do very much. That can be very passive. You might even hire a property manager for that and you’re basically doing nothing. I have some properties in Denver, I live in Washington now. I basically never think about them maybe one two hours a month. I can be very, very passive on those.On the other end of the spectrum, you could be house hacking and you could be in a property every single day. You could buy a property that needs work and DIY. Some of the work that’s super time intensive, so you need to figure out which end of the spectrum you want to be or somewhere in the middle. A lot of people actually, and a lot of the deals I look for now are somewhere in the middle where it’s like maybe you need a cosmetic rehab, but I’m also hiring a property manager, so it’ll be a decent amount of work upfront. Maybe take me two, three months to stabilize the property. But once I am done with that stabilization, everything’s up and running, then I can hand off to my property manager and do very little. So that’s my first step figuring out your strategy here is just think about what you want, how active you want to be, what kind of returns that you want, specifically where you’re trying to get to, that’s going to really set you up for the other decisions that you’re going to have to make that we’re going to talk about starting right now.So the second step here that is really important is just kind of understand what’s happening, big picture in the real estate market and the economy because this is going to dictate what kind of properties you look for and I highly recommend you look at things like BiggerPockets. We put out all sorts of information on our blog on this podcast about what’s going on in macroeconomics. There’s also great sources and data and Redfin and Zillow and all those other kinds of places that you can also check out. But because you’re here right now, I’ll just tell you what’s going on. Basically, we are entering what I would call a buyer’s market, which means that there are more sellers than buyers right now. This creates two or three important dynamics that you need to know when there are more sellers than buyers, that generally means buyers have the negotiating power when they’re trying to land a deal and that’s good.That also means that there are going to be more properties for you to view than there were say during the pandemic when it was super hard to find even a property that you could go tour, let alone make an offer and actually successfully land. The third thing though is that with a buyer’s market and more sellers than buyers, prices can come down and so you need to think about strategically buying a rental in 2025. You need to think about balancing the risk and the reward because there is going to be risk properties are going down and you don’t want to buy a property that’s going to go down a lot after you buy it, right? If it goes down 1% after you buy it, it’s probably going to go back up. That’s always what’s happened in US history, but you obviously don’t want to buy something and maybe heard this term catching the falling knife.You don’t want to buy something while it’s dropping that much, so you can get around that. There are absolutely ways to mitigate that risk, which we’re going to talk about that, but at this point in setting your strategy, you just need to know that that’s happening so that you can, when you’re building your buy box and figuring out how to go land the right rental for you, account for that risk that’s going on. So just again, as a summary, we’re entering this period where there’s going to be a lot of opportunity because prices are going down, there’s more deals on the market, but in certain markets, certain assets are going to see declining values and you need to mitigate against those risks. So hopefully you can see a strategy start to come together. You have your goals, what’s important to you, what’s going on in the big picture, and if you take this time to figure out these things, then figuring out what size property, what neighborhood to buy in, how to rent it out, those kinds of things get a lot easier once you’ve figured out these two things.After this, we need to move on to step two, which is going to be figuring out a market or if you already know where you’re going to invest, figuring out your neighborhood and then actually going to build your buy box. But we do need to take a quick break. But before we go, this segment that you’re listening to is brought to you by reim, the all-in-one CRM built for real estate investors. Automate your marketing, skip Trace for free, send direct mail and connect with your leads all in one place. Head over to reim.com/biggerpockets now to start your free trial and get 50% off your first month.Welcome back to the BiggerPockets podcast. We’re here talking step-by-step. How do you buy a good high quality low risk rental here in 2025? Before the break, we talked about the importance of starting with a strategy that is the title of my book. I think it’s super important to really nail down that strategy and nail down your goals before you move into actually buying properties. But once you’ve done that, follow the steps that we highlighted before the break. It’s time to move on to step two, which is determining a market or a neighborhood. Now, some of you might know immediately what market that you want to invest in. I think all things being equal, if price points are the same, if cashflow prospects are the same, you should invest in your own backyard. The area the best is going to be the best place for you to invest most of the time except if your strategy isn’t conducive for it.And again, this is why you have to start with the strategy because if you say cashflow is by far the most important thing to me, but I live in San Francisco, those two things just don’t really work that well. I’m sure you can still find deals if you’re really good at this, but it’s going to be difficult. You’re probably better off figuring out a market out of state that is going to offer better cashflow prospects and investing out of state. It might sound scary. I do it. It’s really not that bad. I think it’s actually great. It allows me to really diversify my portfolio and I honestly haven’t had any real challenges with managing a property out of state that I don’t have with a regular property down the street, but there is some convenience element to it and the knowledge of the market element does really matter.So for me as an out-of-state investor, I’ve had to invest a lot of time studying the market. I’ve flown out to the markets I invest in multiple times. I spend time there, I learn about them, and that’s something you should do if you’re going to go out of state. We’ve actually done entire episodes of this podcast. We have a ton of videos on YouTube about how to pick a market out of state. So if you want to do that, go check those out. Not going to get into it in super big detail here today because we’re just talking more step-by-step, but figuring out a market that works for you is really important. Even if you know the market, maybe it’s your home market or an out-of-state market, you also figure out the neighborhood because I mean I’m sitting here in Washington state, Tacoma is completely different from Seattle.There are different areas in Seattle that are very different from one another. When I was living and mostly investing in Colorado, I tried to stick to one very particular neighborhood both for convenience and because I believed it was going to appreciate a lot and those decisions have really sort of impacted my returns and the types of returns. There are areas in Denver that were getting great cashflow. There were some that were better for appreciation. That is still true. And so you, again, the whole key to starting with that strategy is to align these decisions that you’re making with your long-term goals. So if you’re appreciation focused, find a neighborhood that is appreciation focused. If you’re cashflow focused, find a neighborhood that’s good for that. Again, if you want help doing these things, we have other resources for you on BiggerPockets that are free. You should definitely go check those out.But this is step number two. After you figure out your strategy, you figure out a market and a neighborhood. The third step is building your buy box. This is fun. I always like doing this part and I think a lot of people actually wind up skipping to this and skipping over some of the good stuff that you should be thinking about. But building a buy box is fun. If you’ve never heard of this term buy box, it’s basically just a set of criteria that you are using to go search for properties because even if you know your strategy and you’ve picked a area or a specific even zip code that you want to invest in, there’s still going to be dozens if not hundreds of properties for sale in those areas, and that’s too many to realistically look at. You shouldn’t be looking for every single property that hits the market, right?You want to narrow down criteria that suit your strategy. So these can come in different ways and to be honest, different people think about buy boxes differently. Some people focus a lot on the physical characteristics of the property. I only want things with a new roof or I want a certain kind of siding, or I only like things that are built on slab and don’t have basements. That’s totally fine. I know a lot of people who have been very successful on that, and I think that’s particularly important if you’re going to be doing value add strategies where you’re doing a lot of renovations. For me personally, I think it helps to start your buy box sort of at the high level, like asset type. So I primarily look at residential property, so I’ll buy single families and I’ll buy up to four units frequently because these are all the kinds of deals that you can get residential financing on, which is really advantageous.So that’s sort of the first criteria. So let’s just pick an area, let’s just call it Milwaukee and say that we want to buy a residential property in Milwaukee. The next thing I would think about is what price point that you are willing to pay. Now, if you are an experienced investor, you might say, I’m willing to pay any price point, that’s fine, but if you want your deals to cashflow, which I recommend you do, and I am not a big proponent saying that you have to have 10% cash on cash return, I don’t really believe that. I think it depends on your goals like I was saying earlier, but I do believe especially in 2025, this is one of the things that we need to be thinking about right now to protect yourself and to make sure that you are making the best risk adjusted decisions here, you should be cash flowing.I think that you should have every deal paying for itself, and you shouldn’t be coming out of pocket very significantly, at least after the first year. In the first year of a deal, you’re usually going to have to come out of pocket to stabilize an asset that’s totally normal. That’s not what I’m talking about. I mean, once it’s stabilized and up to its intended use, is that cash flowing? To me, the answer has to be yes. I mean other people have different opinions, but to me the answer is yes. So again, back to the price point thing, I think you need to figure out at what price point can you generate cashflow. Now, of course that’s going to depend on rents, but typically in most markets it goes up to a certain point. If the average rent, let’s say Milwaukee is 1500 to 2000 bucks, let’s call it 1500 bucks in Milwaukee, you’re buying a duplex, you’re going to get $3,000 a month.Just rough estimate here, just based on doing this for a long time, I’d say that you could pay for duplex three 50 to 400 max to make that cashflow. I’m not factoring in taxes as kind of a back of the envelope thing I’m doing in my head right now, but this is what I recommend you do is think about what is the most you can pay for a duplex, because now you’re going to narrow down that buy box even more. You’re buying a duplex your price point. At this point, then I sort of start to get into more of the characteristics, the physical characteristics of the property. So if I’m trying to maximize rent, I would say I want each side of the duplex to have at least three bedrooms, right? That’s going to maximize my rent. Then one of the things I usually like is having a property that’s built in the 1960s or more recently I’ve bought buildings built in the 18 hundreds, but when I’m thinking about long-term buy and hold, I would prefer to have a property that’s built more recently, don’t have that knob and tube wiring, none of that business, that’s just an example.Think about those things, bedrooms, layouts, all of that’s important. One thing that I always recommend to people too that I think often gets overlooked, I call it like an X factor. Every market has an X factor that is going to be super in demand in that market. When I was investing in Denver, I always wanted to get places with yards. If you’ve been to Denver, everyone in Denver has a dog, and so I always knew that if I accepted pets and I had yards fenced in yards, that I was going to get really high demand and I would probably be able to command a higher rent, and that worked for me in certain markets. So imagine you’re in the Midwest, I would imagine a heated garage would be super important, or a place where there’s hail, you might want at least a carport. These are sort of x factors about your individual market that I think are really, really valuable and sort of often overlooked.So the cool thing about this is this isn’t something anyone else can look up for you. This is something you should learn by either living in this market, talking to a property manager, talking to an agent. They can really help you nail down what these X factors might be and can help you sort of refine your buy mugs. Alright, so that was step three, and again, just as a reminder, we talked about finding your strategy is step one. Then picking your market and neighborhood at step two and then building your buy box in step three. And again, with all of these things, I’m trying to give you the step-by-step guide here and can’t go into every one of these in details, but basically every one of these steps has other resources on BiggerPockets if you want to go check that out. So we have plenty of other things that help explain how to build your buy box if you want more help with that. That said, we need to take one more quick break, but when we come back, we’re going to resume with step four, which is building deal flow. Then we’ll talk about analyzing and negotiating deals, due diligence and closing, and then we’ll wrap up. We’ll be right back.Welcome back to the BiggerPockets podcast. We’re here talking about how step-by-step to buy a rental property in 2025. We’ve gone through three of our steps, which are setting your strategy, picking your market, and building your buy box. Step four is building deal flow. If you haven’t heard the term deal flow, it’s basically you need a source of leads. You need to be able to see a bunch of different properties before you go out and buy them because even when you have a buy box, there’s going to be multiple or dozens of properties that meet your buy box criteria and the perfect property for you might not be on the market when you start looking. So you need a way to be regularly viewing potential deals that you can analyze and think about investing in. There are a couple of different ways that you can do that.First and foremost, I personally think the easiest way to do that is by working with an agent, working with an investor friendly agent specifically, you need to find someone who understands what you’re thinking about and what is important to you as an investor because obviously pretty different than what’s important to a homeowner, for example, and you need to be working with someone who really gets your priorities, and so an investor friendly agent is a great way to do that. If you don’t have one, we can hook you up for free on biggerpockets.com, just go to biggerpockets.com/agents. But to me, this is kind of the easiest thing to do. I have bought the vast majority of deals that I buy from an agent on market kind of deals. The second thing you could do is use technology to filter down your deals. So when you go on Zillow, right, it’s not set up for investors.They don’t have things like cashflow. They don’t have things like IRR or annual ROI or anything like that. And so it kind of makes it so that if you’re using Zillow, you have to analyze almost every deal. You need to go get the projected rent. You need to calculate all the numbers there to see which of the dozens or hundreds of properties on Zillow actually fit your strategy and are going to be good for you. But there are tools like bigger deals, that’s a tool for free you can use on biggerpockets.com, but there are plenty of other tools that you might have a favorite one of. You can use those technologies to filter down deals because I know people have been saying for years that there are no good deals on market, blah, blah, blah. That wasn’t even true during the pandemic. There were still good deals on the market, but one of the things about current market conditions like we’ve been talking about is that more deals are on the market and more deals in my opinion, will be coming on the market in the next couple of months.And so when there’s more properties, that means more opportunity, but it’s also more stuff that you need to sort through. So using technology and some of these platforms that are built to help investors narrow down potential investments can be really beneficial to you. The third source of deal flow that you can consider is basically direct to seller marketing. You may hear this called direct mail, driving for dollars, cold calling. They’re basically all the same thing. You’re trying to identify people who haven’t put their property up for sale yet, but might be willing to work with a investor and sell their property. And the way you get those people’s attention is by direct mail or cold calling or driving for dollars. And so you can do this, it’s a great way to find profitable deals, but you should know that it’s just time intensive, so it’s going to take you time and money to figure out how to do this well, if you’ve never done it before, there’s a ramp up period.There’s a cost to these things. You do need to sort of invest in this strategy, and so for some people this might be a great way to get deal flow. For others, you might just want to stick to the more I’d say time sensitive approaches, which is working with an agent or using some of these tech platforms to get your deal flow. So as you’re looking for a property, just figure out what you’re going to do. I think pick one or two and commit to them. There’s really no reason not to work with an agent. That’s a great way to do it. Decide then if you want to use any technology and if you want to look creating for your own opportunities as well, you can do that too, but that would be step four. So you’ve figured out your strategy, you picked your market, you’ve built your buy box, now you got deal flow, right?You’re seeing how this is coming together. Hopefully you figure out what you want and then you sort of build backwards into the very specific deal that’s going to get you there. You need to figure out each criteria, like what kind of deal that’s your buy box and then where you’re going to start looking at these. Once you start getting these deal flow, all these leads, these potential properties, potential investments start coming into you. Then you need to start analyzing, negotiating and offering on deals. Deal analysis to me is a hugely important part of being a real estate investor, but it doesn’t need to be that hard, right? I think a lot of people hear the world analysis or they think it’s going to be a ton of math. This isn’t really hard math. It’s multiplying and dividing and honestly, again, there are tons of tools that can do it for you.We have calculators on BiggerPockets that are meant just to help you evaluate rental properties, so don’t get intimidated by the idea of deal analysis. Basically what you’re going to be doing is taking all the leads that you’re getting from wherever your deal flow is coming from. So let’s just assume for this example that we are using an agent. So your agent’s going to send you five properties a week, 10 properties a week. You need to evaluate them and make sure first and foremost, do they meet your buy box? Hopefully they are because your agents should be sending you things that are within the buy box that you’ve discussed with them, but double check, make sure that’s happening. Once you do that, then it’s time to sort of figure out if this is a good investment because a duplex that meets all of my criteria, some of them might be a good investment and some of them might not.Some might be overpriced, some might be in an area with low demand for rent and I’m not going to be able to raise rent over the next couple of years. That’s what your job is as the investor is to go and run this analysis. So basically you can go look at the calculators, but here’s the general idea. You take the total amount of rent that you are able to generate, and you can find that out by talking to a property manager or using technology. We have some on BiggerPockets. There are other tools out there too, but figure out what you think rent can be, so let’s just call it $3,500 for a duplex in Milwaukee, right? We’re figuring that out. That’s the first step and one of the most important things in deal analysis, and then all you’re going to do is basically subtract all the different expenses that you are going to have first and foremost, like your mortgage payment, so figure out what your mortgage rate would be and you can easily hop onto a calculator and figure out what your payment’s going to be.That’s probably hopefully going to be your biggest expense in any rental property. But then you also need to factor in things like maintenance and capital improvements and having cash reserves, vacancies, turnover costs. You can find lists of this stuff everywhere, but basically make sure you’re accounting for every single potential expense. I cannot tell you how many people tell me that they have a cash flowing property because they’ve say that their rent is 3,500 and their mortgage payment is 2000 and they’re cash flowing 1500 bucks. That is wrong. That is completely wrong. That is not what cashflow is. Cashflow. You have to account for every one of your expenses that includes vacancy, that little things that you don’t want to think about. Think about them. This is the time to think about them. Otherwise, you are going to be very disappointed when you go and buy this property and you realize there are other expenses other than your mortgage when you own rental properties, and the reality is, I think a lot of people shortcut this because it disqualifies a lot of properties.When you factor in every one of these expenses, not a lot of them are going to make sense, and that’s okay and that’s a good thing. Honestly, you should be conservative. You should be picky when you are looking for real estate deals. Maybe one out of 20 works, maybe one out of 50 works, but you should be spending your time analyzing these deals upfront to make sure they’re going to be great deals, particularly in this kind of market where you’re not getting these tailwinds from appreciation and property values just going up. I think this is super important. On top of this cashflow analysis, which is really important, you also want to project what your total return’s going to be. So look at things like amortization appreciation and your tax benefits to understand if this is going to be a good deal. When you get your deal flow, let’s just say over the course of three months, you look at 50 deals in Milwaukee, let’s just say five of them are going to pass your analysis 10%, then it’s time to go and actually negotiate for these deals, and this is the thing that really is going to matter in 2025.I talked a little bit earlier about not wanting to catch a falling knife and negotiating is where you can really make sure that you are protecting yourself against downside risk in the market. This isn’t 2021, it’s not 2022 when you could just buy something and then three months later it’d be worth like 10 grand more. That is not happening right now. Some markets are still growing, but they’re going to be growing slowly. Some markets are modestly declining. I wouldn’t say that you have to omit either of those. Just as an example, I’ve been telling people this story a lot recently. I bought my first property in 2010. The market declined for two years after I bought it, but I was able to buy that property for $10,000 under asking, and that protected me against some of those declines for the next two years, and that’s sort of what I’m suggesting you do today.Find sellers who are motivated, whose properties have been sitting on the market, who’s had a cancellation in their property, in a contract who have had price drops, and find a number that you feel comfortable with. If you think property values might go down another two or 3% in the next couple of years, make sure you buy it for two or 3% under what you expect it to be worth today. That might sound like magic, right? Of course, everyone wants to buy it for less, but that’s a good thing about a buyer’s market. I’m saying there’s risk, but then there’s also this opportunity. I said at the beginning of the show, there are more sellers than buyers, so sellers have to compete for you. You are valuable. Again, we weren’t as buyers valuable during the pandemic because sellers could just say whatever they want now, they have to compete for you and they compete by lowering their prices or offering you concessions that have true monetary value for you.Maybe they don’t want to lower their price, but they’ll pay down your points on your and lower your mortgage payment. That’s awesome. That’s a great thing for someone to do. These are the kinds of negotiations that you need to do to protect yourself from some downside risk. And I don’t want to be overdramatic, like if I bought a property today and I bought it at retail value and the property value went down 2% next year, I honestly really wouldn’t be that worried because if you look at the longterm, those property values will rebound and they will start growing again, and that would just be a paper loss, but I mean, why not, right? We have power. We have leverage in a buyer’s market. Why not use it? So just as a reminder, that’s what you go out and do, right? I said that example, you have deal flow of maybe 50 duplexes you’re looking at in Milwaukee.Then you get five of them that pass your numbers. Then go and negotiate on five of them and see which one you can get the best deal on. Maybe three of those sellers won’t budge. They’re stubborn, they just put it on the market. They don’t want to work with you, maybe two of them. You get into productive conversations and then you pick the one that gives you the best possible deal that you can buy. This is it. This is the blueprint for buying a rental property that is low risk and high upside in 2025. That is not. However, our last step, we do need to just quickly talk about due diligence in closing, and this is not the fun stuff that people like to talk about. They love offering, getting things under contract, but you don’t stop there. You do need to do your final due diligence.This is when you go out and you get your inspection and you figure out your scope of work. If you’re going to do value add, this protects you. Again, you want to make sure that the property isn’t full of things that are immediately going to break or unknown risks. You want to address them with the seller if you need to or if you’re going to do a value add. You want to make sure that your numbers are going to make sense. So for example, if you’re going to renovate the property, go get bids for your project from contractors while you’re still under contract to figure out if this is going to make sense. The last thing you want to do is close on this property only to find out that, whoa, actually the renovation that I was expecting to pay 25 grand for, I’m paying 50 grand for it.That ruins the whole deal. So do that. You can also do things like verifying your rents, your utility payments, and just double check everything, right? There’s no reason not to. This isn’t 2021 where you have to go and waive your right to an inspection and appraisal in the buyer’s market that we’re in. Do your due diligence. You have the right to do this, and you should be doing this as an investor. And remember, do not be afraid to walk away if there’s something got wrong. Again, in the buyer’s market, you can afford to be patient in these kinds of conditions and you should. That’s basically it. You can also just go and close, I don’t know the exact details of your closing. That’s going to depend on how you finance it, what titled company you’re working with, but hopefully you can see that these steps can work for you, right?These are frameworks that work in any kind of market setting your strategy, picking your market, building your buy box, getting your deal flow, analyzing and negotiating, and then doing your due diligence. Those things are always true and they’re true here in 2025, but I want to just sort of reiterate some of the things I would be thinking about, and I would apply to this framework in 2025 to capture the maximum upside and protect yourself against any potential risk. First and foremost, make sure that these deals cashflow right? This is number one thing I would recommend in 2025 is don’t speculate. Maybe they’ll go up. That’s great. That’s a bonus. I would not come out of pocket in this kind of economic climate to float a rental property for a long time after stabilization. So make sure that after you renovate, after you bring rents up to market rate, after you get everything good and you’re happy with it, it’s got to be cash flowing, at least break even.That’s really important. Number two, make sure you have reserves. You need to have cash reserves, five grand, 10 grand, 15 grand, depending on the size of the property in case something goes wrong. Those are super important. Number three, make sure you’re buying in really good neighborhoods with strong fundamentals. When property values decline, they usually hold up pretty well in the most popular areas, even during bad economic times, and they usually recover the quickest and grow the fastest when prices start going back up in a potential seller’s market. So I’ve never really focused on fringe or suburban areas that much, but I really would be cautious about low demand areas right now, and I would focus on areas that have long-term demand and low new inventory in a lot of markets right now, we’re seeing a ton of building. I wouldn’t want to be there in my own investments right now.And then the last thing is too, this is always true, but just like don’t over renovate right now. We don’t know what material costs are going to be with potential tariffs. We also don’t know where prices are going to go, so be a little bit more judicious with your renovations right now. That would be my recommendation, at least some other people in some markets that might work, but it’s just another thing that I would do, and then again, try to negotiate and get these deals for as low as possible, or get the seller to buy down points or to give you some concessions or credits at closing. Figure out ways to get some additional monetary value out of the seller to protect yourself in the case of downside. Now, I want to just say again, I’m warning against downside risk because there is risk in the market right now, but this is opportunity guys, right?Having more deals on the market. This is when being an investor is fun. This is exactly the kind of condition I think most investors want. You don’t want to be buying when it’s super competitive and you can’t negotiate and all these things, and I get that there is some risk in the market, and you can’t just buy anything, but if you follow these steps and these guidelines, I really do believe that there’s going to be good opportunities out there. I am personally positioning my own portfolio for acquisitions in 2025 and into 2026 because I think there’s going to be a buying window. We’ll see. So that’s it. Hopefully this has been helpful to you guys. Remember, set your strategy, find your market, build your buy box, get that deal flow, analyze and negotiate, and then do your due diligence, and those are the steps you need to follow to buy a rental property here in 2025. Thank you all so much for listening to this episode of the BiggerPockets podcast. If you guys have any questions for me about this, find me on BiggerPockets. You can send me a message on biggerpockets.com or on Instagram where I’m at the data deli. Thanks again. See you next time.