Rental property isn’t expensive like most people think it is. It’s a common myth to believe that you need hundreds of thousands of dollars to have a real estate investment portfolio. Between leveraging your investment with mortgage financing and finding properties under $100K, there are plenty of real estate investment opportunities for you.
But how do you start? Won’t you be priced out by cash buyers who can buy a property and close on it in a week rather than the 30 – 45 days it takes a regular investor who needs financing?
There are ways anyone can invest in properties that are less than $100K and have a decent return on your investment.
How To Invest In Real Estate
Before we dive into where you can invest for less than $100K, let’s look at how you can invest in real estate – it’s not as hard as you think.
First, you don’t need a lot of money. You can leverage your investment by borrowing money from a lender. Today there are many mortgage programs available for real estate investors. With 20% – 30% down, you can own a home. That’s just $20,000 – $30,000 for every $100,000 in sales.
To get started, check your credit and determine how much money you have to invest. You’ll need a 650 – 680 credit score to invest. If you don’t have that yet, work on it before applying for a mortgage.
Next, find a property. This is the part everyone feels overwhelmed. With little capital, you may feel there are barely any opportunities available to you, especially when you’re going up against all-cash buyers – there are, though, on Roofstock Marketplace.
Roofstock makes it easy to invest in property. You search their platform to find the right property. Once you find one, you place an offer and work through Roofstock to complete the transaction.
It’s a lot easier than most people realize.
How Roofstock Works
Roofstock is a gem in the world of investment real estate. They do all the work that would typically fall on your shoulders as an investor. In other words, they handle the preliminary work. All that’s left is to choose a property and complete the transaction.
But that’s not all.
Roofstock properties come with tenants in them already. This means instant cash flow for you from the day you close on the home.
How does Roofstock make it easy? Here’s what they offer:
-
Pictures, floor plans, and 3-D tours – You can view a property from the comfort of your own home, even if it’s located halfway across the country. You’ll feel like you’ve been inside the home after viewing Roofstock’s images and videos.
-
Property inspection – No one wants to invest in a ‘bad’ property, but with Roofstock, it’s not an issue. If the property doesn’t pass their requirements, Roofstock doesn’t list it. You can rest assured that the property is in good condition and ready to make you money.
-
Property valuation – You don’t want to invest in properties that don’t hold their value or are listed for more than their worth, and with Roofstock, that doesn’t happen. Their professional appraisers value the property and make sure its sales price aligns with its value.
-
Run title work – Roofstock professionals ensure the home doesn’t have any liens aside from the seller’s mortgage.
-
Run an insurance estimate – Home insurance is your responsibility as the homeowner, and Roofstock lets you know from the start how much it may cost to insure the home.
-
Evaluate existing leases – Roofstock professionals look at the lease terms, landlord responsibilities, and any other terms that would affect you as the new landlord.
-
Tenant evaluation – Roofstock professionals look at the tenant’s payment history and any other data provided to ensure the property is a good investment and that the tenants are a reasonable risk.
-
Neighborhood rating – When you invest in a property, you invest in the neighborhood. Roofstock professionals look at the area’s crime rate, school ratings, and accessibility to make sure it’s an area desirable for renters.
-
List property management options – If you invest in properties across the country, you need someone to manage it for you. Roofstock works with local property management companies, informing you of the cost and procedures before buying a property.
Where To Invest In Homes For Less Than $100k
Now that you see how easy it is to invest in properties using Roofstock Marketplace check out the hottest areas to invest in homes with less than $100K.
Greenville, PA
Greenville, PA, is a quaint town with homes built in the 1950s that are great for small and large families. With homes as large as four bedrooms available and with neighborhoods near schools and shops, it’s a great place to invest in homes for less than $100K.
Homes in the area have an annual average return of around 10%, and the area appreciates well, giving investors a decent return on their investment.
Davenport, IA
Davenport, IA, is an area with plenty of recreation, as it’s located right along the Mississippi River. It has a tight-knit community with plenty of parks and shops, and it’s an affordable area for families whether they buy homes or rent.
Homes in Davenport, IA, have a great return on their investment (around 11%), and the neighborhoods have great ratings. Values in the area steadily increase, and there is never a shortage of renters around.
Birmingham, AL
Birmingham, AL, has a low cost of living, a great job market, and plenty of recreation, especially for music lovers. It’s known for its steel and iron production, but many other healthy job markets are in the area.
Rental homes available in the area are quaint and built in the 1950s. Landlords have around an 8% average annual return on their investments on rental properties in Birmingham, Alabama.
Indianapolis, IN
Indianapolis is one of the largest cities in the country and yet is also incredibly affordable. It’s a great combination of a variety of neighborhoods with many homeowners and renters throughout the city. Indianapolis is heavy in technological companies and healthcare companies, giving residents plenty of work opportunities.
The average annual rate of return in Indianapolis is around 7%, and investors can buy homes three-bedroom homes for $100K or less.
Freeport, IL
Freeport, Illinois, is a lowkey city outside of Chicago that provides suburban life at an affordable rate. It’s a great area for families, is diverse, and has quality schools. The median home value is around $75,000, and rent is around $650 on average.
Many of the homes in Freeport are historic, built before the 1900s, but are quaint and gorgeous, perfect for families of all sizes. Investors get an average return of 11% on their investments in Freeport, IL.
Matteson, IL
If you want a quiet place to invest and help families out with housing, Matteson, IL, is a great place. It’s beautiful, quiet, and safe for families of all sizes. It’s a safe town outside of Chicago with a diverse culture and plenty of activities for families of all sizes.
Matteson’s homes are small and perfect for small families looking for a safe place to live with great schools. Investors have an average annual return of 8% on their investment in Matteson.
Florissant, MO
Florissant is right outside St. Louis, giving residents the best of both worlds. They’re right outside the city’s hustle and bustle but in a quiet enough area that’s perfect for families or a quiet life. The area is filled with young families and young professionals and has plenty for everyone to do.
The homes in Florissant are gorgeous and perfect for families of all sizes. Investors love the area because the annual average return is around 11%.
Memphis, TN
Memphis, TN, has the beauty of Tennessee without the high cost of living. Memphis is a low-cost area, but with amazing beauty and plenty of recreation. It was named one of the best places to work and play – how does it get any better than that?
Investors can find homes less than $100K that are perfect for families, singles, or couples. With a 10% annual return on investment, it’s a great place to have a home and help families out who can’t buy homes themselves.
How To Decide Where To Invest
Now that you know there are so many places to invest with less than $100K, how do you decide which area is right for you?
Roofstock Marketplace makes it easy to decide as they provide you with a ton of information to make an informed decision. You aren’t investing in an area because a friend of a friend said it’s great or because someone you know made a lot of money. With Roofstock, you use concrete data to help you decide if it’s right for you.
Here are a few factors to consider:
-
Look for a diverse population – You want to invest in an area that has plenty of opportunities to find tenants when your initial lease expires. Don’t focus on areas with a finite demographic, or you may have trouble filling your vacancies.
-
Focus on property taxes and insurance – As the landlord, you cover property taxes and insurance. The costs come right out of your profits, so make sure you’re aware of the costs and can afford them.
-
Look at the schools – If your target audience is families, invest in an area with schools with high ratings. Parents and even young couples without kids pay close attention to the school ratings.
-
Watch the crime rate – Some low-cost areas are low because of the high crime rate. They’re trying to attract more ‘good influences’ to the area, but most people won’t pay high prices for high-crime areas.
Notice we didn’t say you had to live near the property?
You don’t.
It’s easier than ever to invest long distances. You don’t even have to see the property yourself – you can view it online and make a decision when you use Roofstock Marketplace. They take the need to visit the property in person away because they provide so much information that you’ll know more about the property than if you investigated it yourself.
The legwork is done for you – all you have to do is choose a property and a property management company. Roofstock even vets property management companies for you and works the numbers into your net cash flow so you can see the bottom line before you make a decision.
Are You Ready To Invest In Long-Distance Real Estate?
It’s time to invest in long-distance real estate. You know Roofstock Marketplace has properties at much less than $100K and that they do all the legwork for you. It’s not the typical stressful real estate transaction experience people talk about. Roofstock makes it easier than ever to invest.
If you have $20,000 – $30,000 and would love to leverage your investment, and invest in a property worth $75,000 – $100,000, check out Roofstock Marketplace and see how they can help you grow your investment portfolio.
Read more about Roofstock: Roofstock Review
Photo by Jacques Bopp on Unsplash
See more from Benzinga
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
