How to invest in the real estate sector with a small amount of capital?
real estate but didn’t have those big bucks? You can still invest with little money in the sector. The sector provides steady income and high returns in many cases. The demand for housing is high and many cities in the world are facing a housing crisis. This gives an opportunity to the investors to gain immensely even with small amounts of investments. There are many ways to invest with small amounts of capital in the sector. Some of these methods include investing in Real Estate Investment Trusts (REITs), House Hacking and even crowd funding certain investments.
House Hacking:
This involves buying a large unit of a property and carrying out different activities to supplement your income. For example, you could stay in one section of the house and rent out the other part to tenants. For example, a 30-year fixed mortgage at 6% for a house priced at $300,000 works out to a mortgage amount of $2600 per month considering various taxes and other interest payments. In this particular case, you could find two tenants willing to pay $1500 every month per person. This will ensure you are in a position to pay the monthly mortgage amount as well as be left with a small amount of profit. Online platforms such as Air BNB can be effectively used to find tenants and temporary guests.
Want a Loan? Get cash against your Mutual Funds in 4 hours
Investors could also build some form of accessory unit in the land available or any additional space available in the property. For example, one could construct a basement and rent it out for any commercial activity or in the very least offer some storage space within the property. It would be advisable to read the local laws before planning of these activities.
