Many people think you need thousands of dollars to start investing in real estate, but that’s not true. With the right strategies, you can begin building wealth through real estate investing—even with a small budget.
In this guide, you’ll learn how to invest in real estate with little money, reduce financial risk, and start earning passive income.
1. Understand the Different Ways to Invest in Real Estate
You don’t have to buy an entire house or apartment to start investing in real estate. There are many affordable options available.
🔹 Traditional Real Estate Investing (Higher cost but full ownership)
✔ Buy a rental property – Purchase a home and rent it out for passive income.
✔ House hacking – Live in one unit and rent out the rest (great for beginners).
✔ Fix and flip – Buy a cheap home, renovate it, and sell it for a profit.
🔹 Low-Cost Real Estate Investments (Less money required)
✔ Real Estate Investment Trusts (REITs) – Invest in real estate like stocks.
✔ Real estate crowdfunding – Invest in properties with as little as $10.
✔ Lease options – Rent a property with an option to buy later.
✔ Partnership investing – Split property ownership with others.
2. Start with Real Estate Crowdfunding and REITs (Best for Low Budgets)
If you don’t have a lot of money to buy a property, start by investing in Real Estate Investment Trusts (REITs) or crowdfunding platforms.
✅ REITs (Real Estate Investment Trusts)
✔ Buy shares in real estate companies like stocks.
✔ Earn dividends without managing properties.
✔ Can be purchased with as little as $10-$100.
✔ Examples: Fundrise, RealtyMogul, Vanguard REITs.
✅ Real Estate Crowdfunding
✔ Pool money with other investors to buy properties.
✔ Start with as little as $10-$500.
✔ Passive income from rental profits.
✔ Examples: Arrived Homes, Crowdstreet, Fundrise.
📌 Tip: REITs and crowdfunding are great for beginners who want to invest without the responsibilities of property ownership.
3. Use House Hacking to Buy a Property with Little Money
House hacking lets you buy a home with little money and have tenants cover your mortgage.
How House Hacking Works:
✔ Buy a duplex, triplex, or fourplex with an FHA loan (3.5% down).
✔ Live in one unit and rent out the others.
✔ Your tenants’ rent helps pay your mortgage.
📌 Example: If your mortgage is $1,500/month and you rent out a unit for $1,000/month, you only pay $500/month for housing!
4. Buy Rental Property with Low or No Money Down
You can own rental properties with minimal upfront costs using special financing options.
✅ Low Down Payment Options:
✔ FHA Loans (U.S.) – Only 3.5% down for first-time homebuyers.
✔ VA Loans (for veterans) – 0% down payment.
✔ USDA Loans – 0% down for rural homes.
✔ Seller Financing – Negotiate directly with the seller instead of using a bank.
📌 Tip: If you have bad credit or no savings, consider partnering with an investor who can fund the deal while you manage the property.
5. Rent Out a Spare Room or ADU (Accessory Dwelling Unit)
If buying a home isn’t an option yet, you can still make money from real estate by renting out space in your current home.
Ways to Make Money Renting Space:
✔ Airbnb or short-term rentals – Rent out a room to travelers.
✔ Long-term room rentals – Rent to students or remote workers.
✔ Convert a garage or basement into a rental unit.
📌 Example: Renting out a spare room for $500/month adds up to $6,000 per year—which you can use to save for a future property.
6. Consider Lease Options (Rent-to-Own Agreements)
A lease option (rent-to-own agreement) allows you to rent a property with the option to buy it later.
How It Works:
✔ You rent a home and pay extra each month toward a future purchase.
✔ After a few years, you can buy the home using the money you’ve already paid.
✔ Great for people with low credit scores or little savings.
📌 Tip: Make sure the contract specifies how much of your rent will go toward the down payment.
7. Partner with Other Investors
If you don’t have enough money to buy a property on your own, invest with a partner.
How Partnerships Work:
✔ One person provides the money, the other manages the property.
✔ Split profits from rent or sales.
✔ Works well for first-time investors who lack capital.
📌 Example: You find a good real estate deal, but lack funds. An investor pays the down payment, and you manage the property. You split the profits 50/50.
8. Look for Off-Market Deals and Distressed Properties
You can find cheaper real estate by looking for off-market deals and fixer-upper properties.
Ways to Find Cheap Real Estate Deals:
✔ Look for distressed properties (foreclosures, short sales).
✔ Network with real estate agents who specialize in investment properties.
✔ Use “driving for dollars” – Find rundown homes and contact owners directly.
✔ Negotiate with sellers who want a quick sale.
📌 Tip: Some sellers are willing to offer financing or discounts if they need to sell quickly.
Final Thoughts
You don’t need a fortune to start investing in real estate. Whether you choose REITs, house hacking, or rental properties, there are plenty of low-cost entry points to start building wealth through real estate.
💡 Start today—your first real estate investment is closer than you think!