If you want to invest in single-family rental homes but don’t have a lot of money, don’t worry. You’re not the only one. Luckily, despite limited funds, there are numerous avenues to delve into real estate investment.
With inventiveness and strategic planning, you can make your aspiration of owning rental properties a reality. This post will discuss four alternative funding ideas to kickstart your real estate journey:
1. Purchase a Primary Residence
You might be surprised to learn that buying a primary residence is one of the best ways to initiate your real estate investment journey. Unlike loans for investment properties, numerous programs exist tailored to assist first-time or other homebuyers in acquiring a home.
With lower down payment requirements and better interest rates for owner-occupied properties, getting a home for yourself first can make it easier to invest in the future.
A smart way to get started in real estate investment is to purchase a primary residence, live in it for a while, and then convert it into a rental property. This is what many rental property owners did first.
2. Invest in a Duplex
Like purchasing a primary residence, investing in a duplex is also a good idea. The idea is to live in one unit and rent out the other so you can get the benefits of programs that help owner-occupied properties.
Even though sharing your living space with a tenant might seem like a lot of work, the benefits could be huge—collecting rent that could fulfill a large portion of your mortgage payment. This deal reduces your living expenses and permits you to accumulate savings for potential investment endeavors.
3. Utilize a Home Equity Line of Credit (HELOC)
Opening a home equity line of credit (HELOC) on your residential property is another excellent option for people who don’t want to move or share living space with tenants. If your property values have appreciated over the years, your home might have sufficient equity to leverage for acquiring an investment property.
Most lenders usually extend credit up to 80% of your home’s value, but it’s important to keep a close eye on property values and start the application process once a substantial amount of equity has accrued.
4. Negotiate Closing Costs
If you possess adequate cash for a down payment but need to pay for other things, consider negotiating with the seller or your lender to cover all your closing costs. Some lenders issue rebates or incentive programs to ease the cash burden during settlement. Also, sellers who are really eager to sell may be able to pay the closing cost to expedite the sale process.
You can reach your aspirations of owning a portfolio of single-family rental homes if you work hard and plan ahead. This is Real Property Management Seaside, and our team of professional property managers is ready to help you at any time.
We offer a wide range of services in Sarasota and nearby, whether you’re a first-time investor or an experienced one. These include evaluating properties, finding deals that aren’t on the market, and giving you expert help on rental rates and marketing strategies. Contact us online or call 941-225-2533 today to embark on your real estate investment journey!
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.
