For example, what if you purchased land in an affordable yet attractive area to be used as an investment?
You could gradually construct a complex with various buildings on that land, such as a main structure that can be leased long-term and several smaller studios that can be used as vacation rentals. You could also construct an accessory building (i.e., a separate garage to store a washer and drier, bikes, etc.) for common use of the short-term tenants, thereby increasing the appeal of your vacation rental.
Of course, you’d need to search for the optimal land to make such a build-up a success, as well as architect, design, and furnish the buildings in a way that reliably yields monthly earnings in line with your expectations. While this would be no easy feat even for the most experienced real estate investors, it’s possible—and many have used multi-tenant properties to generate passive income.
Knowledge is power: ask the right questions before investing in a passive income property
The best way to avoid expensive mistakes is to learn about all aspects of the transaction before making a commitment. The following list of questions can serve as a starting point for kicking off a new real estate venture:
- How do I find the right property? Should I hire a real estate agent?
- Is there construction nearby?
- How much should I set aside to cover maintenance expenses?
- Should I hire a licensed property management company?
- Is the investment property in a good location?
- Will the cash flow from this property meet my needs?
- Am I making this purchase with an investment mindset or am I emotionally involved?
How BHG Financial can help you establish a passive income stream
We offer loans up to $500,0001,2 with repayment terms of up to 12 years1.This unique combination of features makes it so that you can pursue ambitious projects while still maintaining a high level of affordability.
Furthermore, it’s common for borrowers to take more than one loan from BHG Financial—1 of 2 customers return for additional financing. If you are in the process of building a real estate portfolio or gradually constructing a multi-tenant property, we can fund you at multiple stages as you pay back your original loan. And we’ve streamlined the lending process to provide you with a frictionless experience and dedicated concierge service 7 days a week.
Get started online by viewing your personalized estimate today.
1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile. Finance amount may vary depending on the applicant's state of residence.
2 BHG Financial business loans typically range from $20,000 to $250,000; however, well-qualified borrowers may be eligible for business loans up to $500,000.
For California Residents: BHG Financial loans made or arranged pursuant to a California Financing Law license - Number 603G493.
No application fees, commitment, or impact on personal credit to estimate your payment.