One of the evergreen options for investors is the real estate sector. Plots, apartments, villas are all popular options depending on the objective of the investor. Some may be looking for short-term gains while others may be considered a long term investment scenario to multiply wealth creation. However rosy the real estate business may sound, the market pricing is determined by the factors of demand and supply. These are volatile just like our finances. We may have funds, but may not be in a position to unlock it when we want to buy a plot since there may be a need for a large amount of liquid fund. So the question is how to manage your real estate investments even when you are low on cash. Here are some tips that will help you without your finance becoming a showstopper.
Tips on Managing Real Estate Investment With Low Funds
Secure a 100% finance on the purchase price: One of the most critical and deciding factor with respect to finances is your credit rating and lending history. This will enable you to combine your down payment with the purchase price should your finance history look positive. However, since you are not putting in a down payment, it obviously leads to a higher interest rate and payment. Depending on how quickly you intend to hold or sell your property, your profit margin will be impacted adversely or positively.
Consider a house hack: Also known as an Owner occupied multi-family property, house hacking refers to buying smaller housing units such as a duplex or triplex. Such properties may not fall under a strict apartment category but are quite popular in the market. By renting out other units, while occupying another unit in the same property, you can actually take care of the payment by getting a running income.
Speak to the professionals: There are a number of loan programs available with financial institutions. It is best to talk to a mortgage professional from a reputed financial institution to explore the options and choose the one, best suited for your needs. For example, there are loan programs available where you can even add the cost of repair work to the loan. If you are not in a position to put a large down payment, then there are options for low down-payment on property purchases.
Research on property options: You should also not solely rely on property options from your real estate agent. Take advantage of the internet and your circle of friends and family. You will get a lot of pointers from their experience and also a few recommendations to consider. There is a wealth of dedicated websites that will give you detailed listings of properties including related information. Start with your own neighbourhood to scout for the cheapest properties available in the range you are looking for.
Co-own properties: It is not necessary for you to shoulder the burden of a loan by yourself. You can consider co-owning a property along with a friend or family who is interested in real-estate investment