Using credit to fund a rental property... is it a good idea?

Rental Property
1

I am trying to figure out if investing in rental properties is still profitable in 2024-2025, especially with high interest rates and expensive properties. I recently stayed in AZ and talked to the owner’s son who manages some trailers. He mentioned his mom owns three trailers and that he’s fixed them up. He’s been a millionaire twice—lost it and regained it. The rent was only $500/month, and there seemed to be little upkeep.

So my question is… is using credit a good way to fund my first rental property with little capital? I think starting small and using the rent to cover the loan is doable. The main risk would be repairs. Also, I’d likely need to hire a Property Manager since I might be looking out of state.

A mentor of mine mentioned using Section 8 properties, which could have higher rents, but I know the government has strict requirements. He’s successfully managing 50 properties with a similar strategy. Any thoughts or advice would be much appreciated!

2

Using credit can be a good idea if you do your homework. Just make sure to factor in all costs, including repairs and management fees. It’s all about the numbers!

3

I think starting small is smart! Just be careful with interest rates. They can eat into your profits if you’re not careful.

4

Definitely look into Section 8! It can provide stable income, but just be ready for those regulations. They can be a bit strict.

5

Have you thought about local markets? Sometimes you can find better deals with less competition. Check out areas where prices are still reasonable.

6

Using rent to cover the loan sounds feasible, but don’t forget about unexpected expenses. Make sure to have a buffer!