What is the best type of real estate investment for those on a tight budget?
There is no question that investing in real estate can be beneficial to one’s future. However, not everyone knows how to procure the funds to get started. That’s okay. Everyone has to start somewhere. Maybe you’ve inherited $20,000; or you’ve finally managed to save up $10,000. Maybe all you have is $5,000. Perhaps all you’ve got is a couple hundred bucks. Whatever you’ve got, there is a way to get started in real estate investing. Which is right for you?
1. Real Estate Education: If you haven’t yet, one of the best investments you ever make will certainly be in your real estate investing education. The more you learn and know upfront, the better choices you will make with your initial investments. You will notice more options available to you, and how much more profitable they can be in the right hands. In fact, if you can only invest in your real estate education – do it.
2. Partner Up: Partnering up is a great investment of your time, and it continues to be used by those with billions of dollars in capital, and decades of experience. Maybe you can bring money to the deal and leverage someone else’s experience. Maybe you have time or handyman skills you can add while someone else puts up the money. Partnering up is a great way to earn while you learn.
3. Fix & Flip Houses: Perhaps you’ve got a knack for handyman type work. Maybe you know someone who does? Or maybe you are eager to learn, and flex your interior design skills. This can all add ‘sweat equity’ to a property and create profits for fixing and flipping houses. There are still many very inexpensive homes out there if you can handle fixing them up and turning the ugly ducklings into castles.
4. Wholesaling Real Estate: Real estate wholesaling is often chosen by those on tight, or even zero dollar budgets. It can be one of the best real estate investment strategies for those with little to start with, and that need to make lump sums of cash fast, with little tolerance for risk.
5. Private Lending: Private lending can be a great way to put the money you have to work. This is especially true for those without experience, time, or interest in physical labor. Just loan your money to other real estate investors that do have the time, experience, and labor, and participate in the rewards. They may offer you a share in the profits, or an attractive rate of interest with regular cash flow payouts. Many may accept amounts as low as $5,000 or $10,000 to participate in their investments.
6. Turnkey Real Estate Investing: Those looking for a solution might find turnkey property investing a great fit to any budget issues. If you’ve got a little cash for a down payment, and reasonable credit, you can buy turnkey rental properties that have already been renovated, and already have tenants.
7. Lots and Land: Lots and raw land can be some of the least expensive real estate. This can make it very attractive for those starting out on limited funds. You can buy them with cash, and while they may not produce rental income (though they can), holding costs are very low. Depending on the area, lots size, etc.; your annual property taxes may be less than $100. That’s a lot less than if a rental home goes vacant for a month, or you need to replace an air conditioning unit.
8. Buy Your Own Home: If you haven’t purchased your own home yet, it could be your best investment. After all, you need a home. Instead of paying for someone else’s mortgage and investment property, you could be building equity and wealth in your own home. It can be a great insight for investing in further properties, and may require the least cash. There are plenty of low and no down payment options out there, as well as grants.
Where will you start?