If you have a dream of building a real estate portfolio you may be wondering how it is possible if you don’t seem to be able to save much money. The good news is that there are ways to get started in real estate investment with very little money.
However, before you dive in it is important to verify that this is what you want. It can appear like an attractive opportunity. You get a house, someone else pays the mortgage, and you ultimately get a retirement fund.
The reality is not always the same as renting property can be a costly business, especially if the tenants stop paying the rent or trash the property. If this worries you it may be better to flip properties, buying them cheap, renovating them, and selling for a profit.
1. Buy A Primary Residence
If you don’t have the funds to get started in real estate investing then purchase a property as your main residence. You can do this with very little money down providing you are earning.
After you’ve lived there for a year or two, move out, using the equity you have built up to fund a second house purchase. You can now rent the first home and have taken your first step on the ladder.
2. Get It Cheap
This is especially beneficial if you are planning on flipping the property. The best approach is to find a local reputable real estate auctioneer and see what properties they have to offer. You will need to sort finance before you start bidding.
It is also important that you are aware the property you buy may need substantial work, which is why you should have a survey done before you visit the auction.
But, if you bid successfully you can get a property for much less than it is really worth. A quick home renovation will allow you to sell it and start generating the funds for your next purchase.
3. Go With A Duplex
Another good way of getting started in real estate investment is to purchase a duplex. This gives you somewhere to live and a property to rent out. You will find this is the start of your portfolio as you can quickly build equity and start looking at a second property.
4. Seek Investment
There are plenty of people with money spare that are happy to take a chance on investing. You will need to identify some of these people in your area, private individuals are usually best. Then, create a business plan that shows how you will generate funds from your real estate investment. You can present this business plan to potential financiers and secure the funds you need without risking any of your own money. Of course, your yield will also be less.
If you already have a property but want to start investing the easiest option is to release the equity in your home. Depending on the value and how long you have lived there you may have a significant amount of equity which will allow you to put a down payment on more than one property.
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