How to Invest in Real Estate With No Money
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Investing in Real Estate Doesn't Require Tons of Money

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Jan. 22 2021, Published 2:23 p.m. ET

Investing in real estate can create security and equity for your future. It's a diverse industry that doesn't just include buying houses and renting out the rooms. Real estate can be anything from homes to commercial buildings, hotels, and even bare plots of land. 

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It may seem like investing in real estate is only for people with disposable income, but you can get involved in this industry with little or no money. If anything, you just need to fund the maintenance costs of the property.

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Why investing in real estate is a good idea

According to CNBC, millionaires think that real estate is the best investment you can make. It can make you money year-round as long as you have a tenant and there are tax breaks for homeowners. Besides, there will always be people who need someplace to live. 

Millionaire Peter Hernandez told CNBC that real estate increases in value over time and "outperforms" other investments. "You get a tangible, usable asset, whether you’re renting out an apartment or commercial building for income or buying a home," he said. 

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An article in Entrepreneur talks about how real estate is more stable than investing in the stock market. Even when the real estate market drops, after it improves, the value of your property also improves. The longer you have your investment, the more risk is reduced.

The stock market doesn't offer this kind of security. Even though the market goes up over time, your investment isn't necessarily improving just because you have owned it for a long time and it doesn't improve your equity. Also, there are tons of factors outside of your control that impact the stock market. 

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How to invest in real estate with little or no money

There are simple ways to invest in real estate without breaking the bank. One option also gives you a place to live while you do so. If you invest in a duplex, you have the privacy of your own place in one unit while someone else rents the other unit. The rent can help pay off any loan you used to secure the property or pay off the property.

You can also create a home equity line of credit on a property. According to Bank of America, this option is when someone borrows against the equity in their home and the house is used as collateral for a line of credit. 

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Loan Paperwork
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The individual can borrow as much as they need to during what's called a "draw period," which typically lasts ten years. Usually, the individual has 20 years to pay the money back. 

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For an even simpler option, you could rent out a room in your home. This way, you have options when it comes to tenants and you have control over who stays and for how long. Websites like Airbnb can be great options for shorter-term stays.

Investors don't need to do much to get started. Investing in real estate can help you to reduce your expenses or bring in extra money. You can do this with your primary residence or another property. 

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