Have you outgrown your Plainview, NY, home, or do you simply want a change? You’re not alone—there are lots of reasons to look for a new home, from downsizing to upsizing to providing a better location for you and your family. Plus, historically low interest rates provide quite the incentive.
While most people simply sell their old home and use the proceeds towards a down payment on the new one, that’s not the only way to make use of your old property. Here at Safeguard Self Storage on Old County Road, we’re experts at providing storage for movers and renters alike, and we’ve got the tips you need to figure out how to create passive income by buying a second home.
Why You Should Consider Renting Your Plainview Property
With many benefits to renting your property, it’s no wonder why so many people are doing so. A few of the benefits include:
- Passive income generation—Earn money without working for it. A good deal!
- You can sell at an optimal time—By renting, you can choose to sell when it benefits you most.
- It provides a safety net—Should you need to move back or sell for fast cash, you can do so.
How to Buy a Second Home and Rent the First
There are few steps that can make the process of renting out your first rental property a little easier. After all, if it were straightforward and didn’t require planning, everyone would do it.
Save, Save, Save
Normally, when you sell your home, you can use the proceeds towards a down payment for your new home. Depending on how much equity you have in your old home, the proceeds could account for the entire down payment on the new one.
Of course, if you’re renting your first home out, you won’t be able to use that money for a down payment. That makes it absolutely crucial to save as much as you can for your second home’s down payment.
Use Non-Conventional Loan Methods—Literally
A conventional home loan requires you to spend 20% of the price of the home as a down payment. Spend less, and you’ll be forced to add PMI, or private mortgage insurance, to the loan.
But did you know that the traditional 20% down isn’t your only option? Conventional loans actually just require a minimum down payment of 3%, and while you’ll have to pay PMI, that could easily lower the required down payment by tens of thousands of dollars. If you don’t have good enough credit or a low enough debt-to-income ratio to qualify, another option is an FHA loan, which has a minimum requirement of 3.5% and fewer income/credit requirements.
Get Self Storage to Help in Plainview, NY
When you’ve got your plan set for acquiring your second home and renting out your first, there’s logistics to deal with. One of the best ways to make your move easier and conquer your logistics problems is through the power of self storage. With a storage unit near you, it’s possible to store extra belongings, tools, and more for your rental property and your second home (especially if you downsized).
At Safeguard Self Storage in Plainview, NY, we have affordable storage units and convenient features and amenities to help you create the storage solution you need. Find your Plainview storage unit and get started with your passive income today.