Considering investment in single-family rentals but facing financial constraints? You’re not by yourself in this. Luckily, plenty of options exist for getting into real estate investment on a tight budget.
Through inventive thinking and strategic preparation, you can realize your aspiration of owning rental properties. We’ll examine four innovative funding solutions to launch your adventure in real estate below:
1. Purchase a Primary Residence
Startlingly, buying a primary residence first stands out as a highly effective approach to kickstart your journey in real estate investment. Investment property loans aside, there exists a range of programs specifically meant to facilitate home acquisition for first-time or other homebuyers.
Lower down payments and preferable interest rates on owner-occupied properties make buying your first home a strategic step toward subsequent investment opportunities.
Several accomplished rental property proprietors initially bought a primary residence, inhabited it temporarily, and later transformed it into a rental, marking a strategic foray into real estate investment.
2. Invest in a Duplex
Buying a duplex represents another feasible path similar to acquiring a primary home. Living in one unit allows you to qualify for special owner-occupied property incentives, while you rent out the other unit.
Although the thought of sharing your living area with a tenant might be intimidating, the considerable benefit is the rent collected, which could pay for much of your mortgage. This setup not only cuts down on your living expenses but also aids in saving for future investment projects.
3. Utilize a Home Equity Line of Credit (HELOC)
Opening a home equity line of credit (HELOC) on your home is an appealing option for those not interested in moving or living with tenants. Should the value of your property have increased over time, there may be enough equity in your home to use as leverage for buying an investment property.
Since lenders typically offer credit up to 80% of your home’s market value, monitoring property values and applying for a HELOC after a significant equity increase is fundamental.
4. Negotiate Closing Costs
Should you have enough for a down payment but require assistance with additional expenses, think about discussing with the seller or your lender the possibility of them covering all closing costs. To ease the cash strain at closing, some lenders have rebate or incentive schemes available. Sellers motivated for a speedy sale may also opt to handle the closing costs to accelerate the process.
By being dedicated and strategically planning, you can reach your goal of owning a portfolio of single-family rental residences. The professional property management team at Real Property Management Skyline is on hand to guide you through each step of the process.
No matter if you’re new to investing or have years of experience, our services in Pittsburgh and surrounding areas cover property appraisal, discovery of off-market deals, and professional guidance on rent and marketing strategies. Contact us online or call 412-770-1234 today to embark on your real estate investment journey!
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