Investing in real estate is an excellent idea for using your money. It has the best return-on-investment and can last you for years. If you become a landlord, you don’t even need to wait for years to reap the rewards. The problem with this approach is that there is a significant hurdle in real estate investment: money. You need funds to buy a property, and not everyone has access to large funds. But that shouldn’t be an obstacle. Here are a few things that you can do to start your real estate investment career.
Use Banks and Lenders
Many people think that borrowing money is a bad idea. It can be if you are not using the money. When you invest the money you borrow, you will be able to pay off the loan quickly. But not all loans are equal. To make things easy, you should use the services of a mortgage broker. These brokers do the heavy lifting when it comes to finding a suitable loan. Give them what you can afford when it comes to down payments and interest rates, then they find the best deal available to you.
If you already have a house, then you can potentially start earning money from it. That comes from doing some house hacking. The primary house hack is to add a room or two to your current home. You then rent out the space for use. The great thing about this is that it is much easier to get a loan for home improvement. Some of these have very low interest and have additional privileges, depending on some circumstances. For example, a VA loan will not ask you for a down payment as long as you are a veteran.
Buy In The Right Markets
Many people think that when you invest in real estate, you should invest in hot markets. The problem is that the properties there often have higher price tags. But you don’t need to do so. You should look farther away. Try to find a property in places where you can afford the land. You don’t need to limit your property investments to the region where you live. You might buy some property in another city or state. The great thing about finding a good deal on a property is that you will likely find it easier to get a lender. The results will still be the same, especially if you are thinking of buying for the long-term.
Look For Partnerships
No rule says that you should invest alone. If you have a good friend, then you might consider a partnership. Someone might have more money than you, but you know of a good deal. You can approach your friend and then offer a partnership. They can provide money while you make the sale possible. You don’t even need a friend. Business partners should be simple to find when you attend local real estate meetings.
Move-In For Profit
Buying a house may not seem like an investment since you will be living in it, but you can use it to your advantage. One method is to buy a house and then flip it after two years of living in it after five years of owning. According to the law, if you sell a home and you lived in it for two years, you can apply for exclusion from the sales tax. It can be up to $250,000 as an individual and up to $500,000. That is a lot of money not to pay taxes on. You can then use the money to buy another property and roll the capital into your nest egg. You can build this up to a massive amount that you can use to invest somewhere else.
You can also move to get a loan to buy a house and develop it. You can then buy another place with a loan and move into it while you rent out the old one. The rent can go into paying off the original loan. When you finally pay it off, you will only have a profit from your initial house. You can then take out a new loan to repeat the process. Keep doing this, and you will have several places to your name, all of them earning you money.
As you can see, the lack of money is not an obstacle to real estate investment. All you need is to be smart about the investment, and you can be earning money from their properties in no time.