After maxing out your 401k every year and accruing considerable savings, you may be ready to invest more of your money. It is possible to do this in a few ways, and one of them is to invest in real estate. This has a chance to be quite profitable, especially when you are willing to come up with a highly strategic plan. For instance, you can buy a standard home, fix it up, and start renting it out, but you are likely to find a more profitable opportunity by spending a little extra money and purchasing a fixer-upper duplex.
Fix One Up to Start Renting It Out
The duplex in its current state may not be ready to rent out for either unit, but you can hire affordable professionals and even put some time and effort into fixing the place up on your own to save money. An ideal goal is to find a duplex in which one unit is close to being ready for renting. This will help you start generating income sooner rather than later, and then you can use the income to invest in the rest of the property.
Work on Repairs Over Time
It can be a bit of an inconvenience to work in one of the units after a tenant moves in. It is ideal to devote most of the funds into fixing up the inside and then save the outside changes until later on. You may want to prioritize properties that have a presentable exterior to minimize your initial repair costs. A plain front yard and backyard will also work because you can make improvements over time, and then when the initial lease is up for the tenants, you can increase the rent to align with the improvements.
Be a First-Time Home Buyer
If you do not own a home yet and your family does not have high demands, you can also move into the unit that needs the most work done. This can help you gain eligibility for a first-time home buyer program, which can save you thousands of dollars in the beginning that can be used elsewhere. It is best to go this route when you are ready to live in the home for a few years to meet the requirements. Once you can move out and rent the other unit, you might have earned enough to buy another home for your family.
It may be a big commitment to buy real estate with the intention to rent one or two units, but you will find that it is an outstanding way to invest your money while giving you a lot of control.Share