You’re not the only one who wants to invest in single-family rental houses but doesn’t have the money to do so. Fortunately, there are numerous avenues to delve into real estate investment, even with limited funds.
You can make your dream of owning rental properties come true with creativity and strategic planning. Here are four alternative funding ideas to help you get started in real estate:
1. Purchase a Primary Residence
Surprisingly, one of the most effective ways to initiate your real estate investment journey is by first purchasing a primary residence. Unlike loans for investment properties, various programs exist tailored to assist first-time or other homebuyers in acquiring a home.
Buying a home for yourself first can pave the way for future investment endeavors thanks to lower down payment requirements and better interest rates for owner-occupied properties.
Many successful real estate investment professionals started out by buying a primary residence, living in it for a while, and then converting it into a rental property.
2. Invest in a Duplex
Similar to purchasing a primary residence, investing in a duplex is another possible choice. Living in one unit and renting out the other allows you to take advantage of the benefits that are available to owner-occupied properties.
Sharing your living space with a tenant may sound intimidating, but there are several benefits, including the possibility of collecting rent that might pay off a large portion of your mortgage payment. This arrangement reduces your living expenses and allows you to accumulate savings for potential future investment endeavors.
3. Utilize a Home Equity Line of Credit (HELOC)
Another viable option for those disinclined to relocate or share living spaces with tenants is opening a home equity line of credit (HELOC) on your residential property. If your property values have appreciated over the years, your home might have sufficient equity to leverage for acquiring an investment property.
It’s crucial to keep an eye on property values and start the application process whenever a substantial amount of equity has built up, even though most lenders would only extend credit up to 80 percent of the value of your home.
4. Negotiate Closing Costs
Consider negotiating with the seller or your lender to cover all your closing costs if you have adequate cash for a down payment but need additional expenses. To help reduce the cash burden at closing, several lenders provide rebates or incentive programs. In order to expedite the sale process, motivated sellers might even be prepared to pay closing fees.
You can achieve your goal of owning a portfolio of single-family rental properties via perseverance and strategic planning. Here at Real Property Management Ideal, our staff of qualified property managers is here to help you at every turn.
Whether you are an experienced or first-time investor, we provide full-service property evaluation, off-market deal finding, and professional guidance on rental prices and marketing tactics in Richardson and the surrounding areas. To start your real estate investment journey, Contact us by phone or online at 945-218-6083!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
