If you’ve been thinking about investing in single-family Brookhaven rental homes, however, you don’t quite have the cash to get it, you’re not alone. The good news is that there are many different ways to invest in rental real estate, even if you are a bit short on funds. With regards to funding an investment property with little or no cash, you may require getting a bit creative. By making use of one or more of the alternative approaches listed below, you may be able to make your dream of owning rental real estate a reality.
1. Buy a Primary Residence
It may appear like a contradiction, but really, one of the effective ways to buy your first rental property is to buy yourself a house first. Unlike loans for investment properties, there are many different programs intended to aid first-time or other homebuyers in purchasing a home. Down payment requirements tend to become lower, and interest rates are oftentimes more and more excellent for owner-occupied properties. The majority of rental property owners get started by buying themselves a house, living in it for a year or so, and then turning it into a rental. This can be an effective way to get your foot in the door and begin your investment portfolio.
2. Buy a Duplex
Another option, like the first, is to acquire a duplex. The notion with purchasing a duplex is to live on one side – thus qualifying for some of those favorable programs offered to owner-occupied properties – and rent out the other. The evident drawback here is having to share your home with a renter. But on the other hand, the benefit is that you will be collecting rent that may nearly cover your mortgage payment, reducing your living expenses, and granting you to set aside money for your following investment purchase.
3. Open a HELOC
If moving around or living in close quarters with your renter doesn’t appear like good options, a third approach would be to open a home equity line of credit (HELOC) on your residential property. If your property values have been climbing higher the last year or two, there may be adequate equity in your home to let you borrow against it and use the money to buy an investment property. Plenty of lenders won’t offer you more than 80% of your home’s value, however, so you’ll need to closely monitor your property values and start the application process only after you’ve got a decent amount of equity built up.
4. Reduce Closing Costs
If you’ve got sufficient cash for a down payment but are running somewhat short on other expenses, another strategy you could check out is to ask the seller or even your lender to pay all or part of your closing costs for you. Several lenders grant rebates or other programs to help reduce the amount of cash you’ll require at closing. Also, if you’ve got a very motivated seller, they may be likely to cover the closing costs to make certain of a fast and quick sale.
For those who are prepared to exert the effort, there are a lot of methods to make your dream of owning a portfolio of single-family rental homes come true. Our professional Brookhaven property managers can help! We assist rental property investors, from beginning to experienced, to help assess prospective rental properties, locate off-market deals, and offer expert advice on everything from rental rates to marketing (and beyond). Contact us online to learn more.
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.
