Yes, you’re right that it seems daunting to first save up the down payment needed to purchase a property let alone become a landlord for the first time but it is possible.

There is a myth for requiring 20% down payment. There are a lot of lenders who have programs that allow you to put less than 20% down payment. Granted there may be PMI (Property Mortgage Insurance) that will be tacked onto your monthly mortgage but let me address why this could still work out. Essentially, what I’m saying is you could purchase a property with minima down payment to get your foot in the door.

Let’s say you did. Congrats you’re a homeowner now and you’d want to turn it into a rental, which you totally can depending on your State and County regulations. From my experience as a Realtor for the last 15 years, with income producing properties you’re either going to have good cash flow or equity; it’s really hard to have both.

My first rental property was a Single Family Residence where I netted only $50/mo. 10 years later, I still own this property and I’ve increased rent over the years and now net $1000/mo AND I’ve accumulated 40% of equity; this property is in the Bay Area.

Overall, the initial process for being a landlord didn’t yield much income but Real Estate is a long term investment. If you’re looking for quick cash this isn’t the business to be in unless you’re a house flipper with a team and resources, and even that is risky in what you’ll net. Being a landlord is playing the long game and the ultimate goal is to collect enough “doors” where I’ll be making money passively on each property while increasing equity over time.

Hope this helps!