Becoming a first-time homeowner is a truly exciting move. Few other investments can set you up for financial success and stability like your first home. However, if you’re ready for the next step, you might consider becoming a landlord.
If you have been a homeowner for a while and you’d like to further your economic growth, or if you’re about to be a first-time homeowner and you’re a truly ambitious person, there are a few easy ways to get into the rental game. One of these ideas could be exactly what you need to seamlessly go from homeowner to landlord.
Rent a Spare Room
In a hot market, you’re sure to find a renter interested in sharing your space. Renting a room can be an easy way to get some extra cash to pay down your home loan faster, and it can be a very easy introduction to landlording since it requires no additional financial investment on your part.
The downside is that it does require an investment when it comes to your personal space and privacy. A renter who is also a roommate can be a tricky situation if not planned thoughtfully. Be sure that you carefully vet your renter’s qualifications and personality. Be sure you understand your state’s landlord laws about roommates. It may be your house, but state laws guarantee protection for renters, so you can’t simply kick your roommate out on a whim.
Build an ADU
An ADU, or accessory dwelling unit, is a tiny home on your property outside of the main home. This can also be referred to as a mother-in-law suite. As tiny homes grow in popularity, the advantages to building one can be multilayered. Choose to use your ADU as a guest house and use it on a short-term rental site. Or, choose the route of continual income through a long-term lease agreement with a vetted tenant.
Go Big for Your First Home
If you are an ambitious future homeowner, you can seek an FHA loan and become a homeowner and a landlord at the same time. Find a qualifying duplex, triplex or fourplex, and you may be able to purchase a property that can serve as your home and a rental while gaining the benefits of the lower interest and low down payments.
