Real Estate Investing Tips for Single-Income Households

There are many reasons why your family might be living off a single income. One of you is taking some time off because you have young children, or maybe one is currently on leave for some reason like school or injury. Or maybe you’re just single! Regardless of the reason, many single-income people/couples still want to invest in DFW rental properties.

After all, investing in rental property is a great way to replace your monthly income. And, if you and/ or your partner are currently living off one income, any extra source is likely desired.

Check out the tips below to find out more on how this can be made possible for you/ your family.

Purchase in Strategic Names

For those couples/ people that have an above-average income (despite it being a single-income household), consider taking advantage of one of the most common strategies used in property investments – purchasing in strategic names. By negatively gearing your investment and having the higher-income earning spouse (or only income earning person) make the purchase, you will be able to offset the full value of the tax deductions against your income tax.

Invest in a Family Trust

Setting up a family trust and investing in assets such as rental properties through it instead of your individual name may save you a large amount of money in household tax fees. Since the trust is tax-free, distributions can apply to lower-income families (such as a single-income home). However, keep in mind that the beneficiary of this family trust will need to pay the taxes.

Purchase Property Using a Land Trust

Another type of trust that may be beneficial for investing in a DFW rental property is the land trust. Since a trust is simply an arrangement in which someone holds something of value for the benefit of another party, a land trust can be explained as an arrangement in which someone holds the title to a piece of real estate (example: your Investment property) for the benefit of another party.

Get Life Insurance and Other Income Safeguards

If you are the sole income-earner, having income safeguards in place is essential to you or you and your partner’s financial security and stability. Should anything happen to the sole breadwinner in a single-income couple such as an injury, illness, or death, financial disaster can creep in quickly.
Having life insurance will secure the financial well being of the non-income earner and other family members should the sole income earner pass away. After all, if you invest in rental property and pass away leaving your partner without a job, and with bills to pay, food to purchase, shelter to pay for, possibly kids to care for, and a rental property to handle, they are going to need some sort of lump financial sum to help. Altogether, having financial safety nets in place is even more crucial when a single-income couple decides to invest in something as large as a rental property.

Tips for Investing as a Low-Income Earner

Just because there is one income earner in a couple/ or yourself does not mean that earner makes enough money to purchase investment properties left and right. However, it is possible to invest in DFW rentals as a low-income earner by following some of these tips:
• Understand how much you can realistically afford
• Come prepared with a large down payment
• Reduce your current debt as much as possible before applying for a loan
• Compare different loan types
• Use equity in any existing properties you may own
• Research the market and purchase prices for properties
• Have an emergency fund for rental property maintenance

Though many of these tips are similar to what any property owner should do before purchasing an investment property, as a single-income couple/ person, these tasks are more vital than ever before. When relying on one person’s lower-than-average income to pay for everyday life, in addition to a rental property, there is a lot of preparation that should take place before jumping in and purchasing a property.

There are plenty of options available for those single-income couples/people looking to invest in DFW. And, if the proper precautions are taken, becoming a property owner may not be as difficult as you might have originally thought.

If you find yourself a property owner that also works to provide for your family and you want a break from managing your property on your own, contact All County Property Management Company. We have over 30 years experience and a wonderful staff on hand to take the burden of managing the day-to-day tasks of your investment property.
 Check out our services here.