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Getting started with real estate investing can be intimidating. However, there are a few ways that you can begin to build your portfolio that don’t necessarily involve having a second mortgage.
One such strategy is house hacking. This is when you own a multi-family property or a single-family home with a fully finished basement and decide to rent part of the home out. This will help you get your feet wet with investing and help leverage your money as well.
One of the keys to investing in real estate is identifying your goals. You need to know how much money you have to invest because your down payment will change given your situation. If you don't own a house and are planning on house hacking it, you can take advantage of lower down payments with FHA, conventional, VA, and other loan programs.
Another big factor to determine is whether you want to invest in a single-family home or a multi-family home. With a multi-family property, your down payment is going to be higher—anywhere from 15% to 25%, depending on whether you’re living in it or not. Knowing what you have to put down and what your investment goals will be are essential.
An advantage of investing in a single-family property is that they tend to stay longer. They take care of utilities as well. For multi-family properties, typically the landlords pick up the water, sewer, and garbage expenses. There is more income coming in with these properties, but there are more expenses.
Those are the basics of real estate investing, but each situation is different. If you have any questions for us or want to know more about how you can get started with real estate investing, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.