Whether looking to diversify your portfolio or searching for another stream of income, investing in real estate may be the answer. Home values continue to increase, with the most recent data coming in at an increase of more than 50% over the last five years. Home ownership is not the only way to get into the real estate market. Those interested in this market can also benefit from properties that serve as rental units. This can help to meet both goals noted above: diversify financial holdings while also bringing in a stream of income.
One of the easiest ways to start involves a primary residence. Three tips that utilize a home to get started with real estate investing include:
- Home Equity. Those who already own a home may be able to get a Home Equity Line of Credit and use the funds towards the purchase of additional real estate.
- Live there for one year. There are often more rules when looking for a loan to purchase an investment or second property. If lender rules are a concern, consider starting your real estate investing venture by buying a property to serve as a primary residence for at least a year.
- Get a duplex. This is another way to both live in a property and start building an investment portfolio because you can live in one unit and rent out the other.
Any of these options will come with the need to negotiate an offer to purchase real estate. It is important to carefully review the contract for any unfavorably terms. Keep in mind that these contracts are not set in stone — you can negotiate better terms.