2025 and Looking to Invest in Real Estate

[Michael Klick]

A partner and I, both of who work a full time job, are looking to get into real estate investing. Focusing on a long term rental for our first property, we are just beginning our search. I have listened to plenty of podcasts and ready a number of books, but only a few mention purchasing yours first rental with a HELOC. Would anyone be able to offer general advice to this approach? We do have cash available, but with a large amount of equity in our primary residence, we wanted to avoid tapping into that cash to instead take advantage of our equity. Any insight from those who have done this or those that suggest we don't take this approach would be appreciated.

[Julia Lyrberg]

Hi Michael, Using a HELOC to fund your first rental can be a smart move, especially if you want to keep your cash on hand for other expenses or future deals. It lets you tap into your home's equity, usually at a lower interest rate than other loans. Just be mindful of the variable rates and have a plan to cover payments if rental income slows down. It's a solid strategy if you stay prepared for unexpected costs and keep some reserves on hand. Plenty of investors have used this approach to grow their portfolios.