How to Get Started as a Landlord With a Small Investment

How to Get Started as a Landlord With a Small Investment

Investing in real estate to rent out is one of the best ways to earn passive income and generate wealth. But how can you get started if you don’t have much money to invest?

Fortunately, it’s possible to become a landlord and start earning passive income, even with a small investment.

Keep reading to discover some ways that you can become a landlord without a huge up-front investment.

Buy a Foreclosed Property

When a home’s mortgage holder defaults on payments, the home is foreclosed, meaning the bank takes possession of it. Banks need to do something with the homes they foreclose on, and they often sell them at a low price to be rid of them.

Finding a foreclosed property could get you a lower price and a low interest rate, saving you a lot of money.

Buy a Home as a Primary Residence

It’s usually cheaper to buy a home to live in than it is to buy one to rent out. When you purchase a home as a primary residence, you should be able to get a VA or USDA loan with no cash down payment, saving you money.

You’ll need to stay in your new home for at least one year, but after that, you should be allowed to rent it out to someone else.

Later on, you might even use house hacking to set up a second living space inside it. This will allow someone to rent a section of the home from you while you continue to live there.

Use Seller Financing

If you can’t afford to purchase property in cash but make enough for monthly payments, you might find a seller willing to finance your purchase for you.

When the seller finances a purchase, they agree upon an amount of money that the buyer will pay every month to cover the purchase. It’s basically a loan without a down payment.

Some sellers will be willing to pay closing costs for the buyer in order to have the property taken off their hands. In these cases, it’s just a matter of finding a seller willing to work with you.

Use a Property Manager to Save Time and Money

You’ve probably heard the phrase, “time is money,” and that’s never more true than when you’re a landlord. Tenant vetting, rent collecting, and maintenance can be serious challenges for the new investor.

A property management service can help you save time and money by handling these tasks for you. Working with a property manager can help you avoid expensive mistakes, especially when you’re still a novice.

Start Planning to Become a Landlord on a Small Investment

As you can see, just about anyone can become a landlord with a small investment. As long as you’re prepared for the challenges involved, it can be an effective and rewarding way to supplement your income.

For investors in Albuquerque, New Mexico, Home River Group makes it easy to manage rental properties. Contact us to learn how we can help you save time and money by managing your rental home.

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