If you’ve been desiring to invest in single-family rental homes but sadly find yourself short on cash, keep your chin up—you’re not alone. Happily, there are numerous avenues to delve into real estate investment, even with limited funds.
With creative thinking and strategic planning, you can make your dream of owning rental properties a happy reality. Below, we consider four alternative funding ideas to kickstart your real estate journey:
1. Purchase a Primary Residence
Astonishingly, one of the most ideal ways to initiate your real estate investment journey is by first buying a primary residence. Unlike loans for investment properties, many different programs exist tailored to assist first-time or other homebuyers in acquiring a home.
With lower down payment requirements and more practical interest rates for owner-occupied properties, getting a home for yourself primarily can pave the way for prospective future investment endeavors.
A lot of successful and productive rental property owners started on their path by purchasing a primary residence, occupying it for some time, and henceforth converting it into a rental property—an efficiently strategic approach to enter the realm of real estate investment.
2. Invest in a Duplex
Investing in a duplex is another attainable option precisely like purchasing a primary residence. The concept comprises living in one unit, qualifying for the valuable programs imparted to owner-occupied properties while renting out the other.
While sharing your living space with a tenant may seem discouraging, the potential upside is enormous—collecting rent that could cover a significant portion of your mortgage payment. This arrangement reduces your living expenses and allows you to accumulate savings for possible future investment endeavors.
3. Utilize a Home Equity Line of Credit (HELOC)
Another possible option for those hesitant to change locations 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 as time goes by, your home might have sufficient equity to leverage for acquiring an investment property.
While most lenders usually extend credit up to 80% of your home’s value, it’s significant to look into property values thoroughly and begin the application process as soon as a substantial amount of equity has accrued.
4. Negotiate Closing Costs
If you do have adequate cash for a down payment but have need other expenses, take into consideration negotiating with the seller or your lender to cover all your closing costs. Some lenders grant rebates or incentive programs to lower the cash burden during closing. Furthermore, really motivated sellers may be willing to take care of closing costs to expedite the sale process.
With determination and strategic planning, you can achieve your aspirations of owning a portfolio of single-family rental homes. At Real Property Management Seasons, our team of professional property managers stands ready to work with you every step of the way.
Whether you’re a neophyte or an expert investor, we offer exhaustive services in Centerville and nearby, including property assessment, finding off-market deals, and expert directions on rental rates and marketing strategies. Contact us online or call 615-333-6858 today to help you effectively start 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.
