Are you curious about how to start a rental property business? Let me share how my husband and I did it with just $30,000, eventually growing our portfolio to 28 rental units.
We got married in 2009, and despite being in our early 20s, we decided to buy a house right after our wedding. Thanks to the Great Recession, we were able to purchase a 1,900 square foot foreclosed home at a lower price. My husband, who is quite handy, tackled the renovations himself, and after two years, we sold the house for a $70,000 profit.
With that success, we decided to invest in rental properties. We took $30,000 from our profit and bought half of a double home to rent out. This property already had a tenant, which made things easier. However, being a low-cost purchase, it came with its fair share of maintenance issues. Luckily, my husband and brother-in-law could handle most of the repairs, saving us a lot of money.
Once we had a solid business plan, we created an LLC to protect our personal assets. With our first rental running smoothly, we decided to expand. We used a Home Equity Line of Credit (HELOC) to finance additional properties, buying more single-family homes and foreclosures.
Managing rental properties involves a lot more than just buying and renting out homes. You need to handle accounting, banking, rental agreements, finding tenants, and dealing with maintenance issues. We built strong relationships with contractors for HVAC, plumbing, and electrical work, which proved invaluable.
Setting the right rental price is crucial. Factors like location, number of bedrooms and bathrooms, and whether utilities are included all play a role. We also decided to refinance our mortgages to 15-year terms to pay them off quicker and increase our profits in the long run.
Our goal has always been to create a retirement incentive, so we’ve kept all profits within the business to buy more properties. It hasn’t always been easy. We’ve faced tenant turnover and had to use personal funds at times. But the long-term benefits have been worth it.
Currently, we own 28 units. With home prices on the rise, our plan is to sell off single-family homes and invest in a large rental complex. This will allow us to scale our business even further.
Starting a rental business takes time and effort, especially if you’re not starting with a lot of cash. But it’s possible. Begin by exploring properties for sale in your area and building a network of experts. Write out a clear business plan with actionable goals and a contingency plan for unexpected costs.
You can do it! Becoming an entrepreneur is a challenging but rewarding journey. If you’re passionate about real estate, start small, stay focused, and grow your business over time.