Does HGTV inspire you to buy a fixer-upper of your own? Or perhaps you daydream of becoming the third Property Brother as you drive past homes in your community?
With the rise in popularity of home improvement and house flipping shows on cable, it’s no wonder the real estate industry is booming. If you’re interested in investing in real estate, there has never been a better time to get started.
Homeownership is a dream for many, and owning multiple properties can build generational wealth for your family. When it comes to investment options, however, real estate is on the expensive end; buying an investment property is a big financial commitment and the price tag is not cheap. It can be easy to convince yourself that this investment route is too expensive.
Let’s explore a few practical ideas to save money on your real estate investment journey so you can build your wealth like a pro.
1. Skip The Agent
One way you can save some cash while investing in real estate is to skip hiring a real estate agent. While an agent can be extremely helpful in assisting with a home purchase, hiring one to find your investment property is not necessary and can save you thousands.
Real estate agents take a percentage of the sale price as their fee. Depending on the price of the house, this amount can really add up. There are countless ways to find property online now. If you’re confident in your abilities to find a property on your own, keep that money in your pocket and skip hiring a real estate agent for your investment property.
2. Get Your DIY On
Rather than fronting the cost for expensive home repairs, try DIY! After purchasing your investment home, it’s easy to spend thousands of dollars on renovations that you could have done yourself. Rather than hiring an army of repairmen, assess what jobs you can tackle and save on labor.
However, proceed with caution and be sure you have a realistic idea of your abilities; always leave big jobs like plumbing and electrical work to the professionals!
3. Make A Plan
Before you make moves to purchase your investment property, take inventory of your finances and make a plan for how you will handle the mortgage, repairs, and day-to-day expenses involved in owning a second property. It’s best to partner with an experienced lender and make a plan to handle the financial aspects of your investment.
4. Don’t Go It Alone
If the costs of a downpayment and potential repairs seem too steep, go in on a property with someone else! Many purchase their first investment property with a spouse, family member, or even a friend. This way, the responsibilities are divided and the financial burden is considerably lighter.
5. Thoroughly Vet Tenants
You want to attract long-term tenants to your property that will treat your investment with care and respect. If you let just anyone rent from you and don’t take the time to properly vet your tenants, you could end up with serious damage and repair costs down the line. Mindfully search for your tenants and fill your property with people who will treat it as a home.
6. Buy At An Auction
A great way to save money is to buy a fixer-upper, and you can find many foreclosed homes at an auction for cheap. While you’ll likely have to put time and money into repairs, you can get a great property for below the market value. With a little tenacity and a lot of TLC, you can save money in the long run when you shop for property at an auction.
Despite the pandemic, investors continue to choose real estate to grow their wealth, whether through buying a second home or investing in a rental property. If you’re interested in investing in real estate, consider these helpful ideas to save money on your journey to growing your portfolio and increasing your wealth.