Running on a Shoestring Budget? Here’s a Guide to Owning Your First Rental Property

Posted on Apr 24 2017 - 6:27am by Admin

Home Key and Pen on a Contract For people looking for a steady source of income, residential real estate makes a good choice of investment. With many tenants looking for a good place to call home, you stand a chance of realizing their dreams. While the steep asking prices on rental might seem discouraging, you can still move ahead with your plans. It only needs you to make adequate plans when making venturing into the process.

Fundraise as group

If your finances are not up to scratch, you can join a few of your friends and pool resources. This way, you bring down the capital implication and start your journey at an early stage in life. Be sure to work out the precise terms of engagement, though, to avoid inconveniences later on.

For best results, you should have an attorney draft the agreement. An ironclad agreement between partners ensures that you are all on the same page. While it might be tempting to skip the formality, you should make an effort to put the right structure in place. Otherwise, the withdrawal of one partner can put your investment at risk.

Seek affordable financing

With a little research, you can find affordable ways to come up with the money to finance your first rental unit. Buy a multifamily home, move into one unit, and rent out the other instead of paying rent. With the help of FHA multifamily financing, you start your journey sooner rather than later. With proper planning and pricing, you can have sufficient rental income to cover your mortgage. That way you get to live rent-free and possibly get some additional revenue.

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Rental residential units make a great investment choice, but the high cost of the units may serve as a deterrent to some. Let the above-mentioned pointers help bypass the steep asking prices and start your investment journey.