Purchasing a rental property and becoming a landlord is a great way to earn some passive income. Unfortunately, this is something that for many people seems out of reach. Property costs money and in the US 32% of people don't own their own homes let alone a second one for rental purposes.
So what if you aspire to become a landlord but don't have bundles of cash at your disposal? Is this an achievable dream?
You might be surprised to find out that in fact, it is. Read on to learn some of the ways you can become a landlord with only a small investment.
Look Out for Bargains
While all property does cost money not all properties are priced equally. Like any other type of purchase you'd make, when purchasing a property it's possible to bag yourself a bargain. Especially if you're willing to do a bit of work.
If you look in neighborhoods that aren't as desirable you'll find property prices are much lower. You can find some of the best prices when you begin to look at foreclosed properties.
Foreclosure is a process in which a home gets repossessed by a lending institution after the mortgage holder misses payment deadlines. Such properties will often be priced much cheaper even than other homes in the same area.
The same goes for properties that are dilapidated or in a state of disarray. You can often find old and neglected properties for quite a low price point. The only catch is that you'll have to pour money and time into these types of homes to make them livable for renters.
Pool Your Resources
Another way you can become a landlord with only a little investment is to pool your resources with other like-minded business people. While the money you've got might not be enough for a downpayment on a home if you and one or two other people club together this is something you may be able to afford.
This is also the principle behind what is known as a REIT or real estate investment trust. This is a manner of real estate investing where you pay a certain amount of money to become part-owner of some sort of investment property. Because the cost is being shared between many people the price you'll need to pay will be lower.
Work With What You've Got
If you've got little to no funds available to you there's always the option of renting out your own property. Many people put their homes to rent on a short-term basis (through sites like Airbnb) but you can also do it long-term. Homeowners use this as a means to pay off their mortgages and pay for utilities in their own homes.
Become a Landlord Yourself
We hope this guide has enlightened you on some of the non-traditional routes you can take if you want to become a landlord with only a small investment. If you're looking for more information on this, portfolio management, or anything else real estate-related we'd be happy to help. Get in touch with a member of our team now.