Investing in Real Estate: I'd Buy a Rental Property, But... (Part 3)
November 13, 2017 |
"I'd buy a rental property, BUT..." "I could never come up with the down payment."
I've heard these words in many forms over the years.
$20,000. What can $20,000 buy today? A mid-sized sedan? A kitchen remodel? One semester tuition at a private university? A dream trip to Europe?
How about a rental property that can help fund your retirement? For sake of this illustration, I'll say that the down payment required for a rental purchase is 20% down of a $100,000 home, or $20,000.
Funding a down payment can require a little creativity and thinking outside the box.
Here are just a few ideas:
Sell a vehicle or better yet, if you are in the market for a new vehicle, buy a rental property instead of the car! A vehicle purchased for $20,000 new today (if you can find one for that), will lose most of its value, or be non-existent in 30 years.
What would happen if you put that $20,000 into a solid investment property?
Invest from your IRA Retirement Accounts: If you have an IRA retirement account, this may be a great avenue for you to get involved in real estate investing. For many, there is a certain amount of control over a carefully chosen real estate
investment that is not readily available with stocks. Taking a portion out of the market and diversifying into the real estate market makes sense for many people. There are some nuances and rules to this, so definitely consult your tax professional
before taking any action.
Earn and save extra income. No IRAs or $20,000 lying around? No problem. How about taking a second job or taking on extra work and saving aggressively to make a rental property a reality? Just like paying off debt, saving aggressively for a rental
property takes determination, but it can be done fairly quickly with enough focus.
These are just a few of many ideas out there for coming up with the funds. I am always available to discuss options if you are thinking of investing in the Boise market.