If you’ve been visualizing investing in single-family rental homes but end up in need of money, rest assured—you’re not alone. Thank goodness, there are numerous avenues to delve into real estate investment, even with limited funds.
With inventiveness and strategic planning, you can make your goal of owning rental properties a reality. Below, we investigate four alternative funding ideas to kickstart your real estate journey:
1. Purchase a Primary Residence
Shockingly, one of the most successful techniques to initiate your real estate investment journey is by first buying a primary residence. Unlike loans for investment properties, several 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, purchasing a home for oneself can serve as a foundation for subsequent investment pursuits.
Numerous effective rental property owners started by purchasing a primary residence, dwelling in it for a while, and subsequently converting it into a rental property—an essential way to enter the realm of real estate investment.
2. Invest in a Duplex
Investing in a duplex is another practical choice similar to purchasing a primary residence. The idea includes living in one unit and qualifying for the favorable programs proposed for owner-occupied properties while renting out the other.
While sharing your living space with a tenant may appear challenging, the potential benefits are considerable—collecting rent that could cover a substantial portion of your mortgage payment. This procedure reduces your living expenses and allows you to accumulate savings for future investment endeavors.
3. Utilize a Home Equity Line of Credit (HELOC)
An alternative course of action for individuals who are unwilling to relocate or cohabitate with tenants is to establish a home equity line of credit (HELOC) on your residential property. If your property values have appreciated with the passage of time, your home might have sufficient equity to leverage for acquiring an investment property.
Although the majority of lenders generally extend credit up to 80% of your home’s value, it’s crucial to closely monitor property values and initiate the application process once a substantial amount of equity has accrued.
4. Negotiate Closing Costs
If you’ve got adequate cash for a down payment but require funds for additional expenses, consider negotiating with the seller or your lender to cover all your closing costs. Certain lenders provide reimbursements or incentive programs as a means to mitigate the cash burden during closing. Additionally, sellers who are highly motivated may be prepared to assume the financial burden of closing expenses to expedite the sale process.
One can achieve their aspirations of owning a portfolio of single-family rental homes through diligence and strategic forethought. Our team of seasoned property managers is readily available to provide assistance at Real Property Management Icon.
We provide a wide range of services in Lewisville and the surrounding areas, catering to both experienced and novice investors. These services encompass property evaluation, identification of off-market opportunities, and expert guidance on rental pricing and marketing tactics. Contact us online or call 469-895-9788 immediately to 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.