Invest in Real Estate and Live Rent Free

Real Estate Agent with Karen Parsons-Fiddler, Broker 949-510-2395 BRE# 01494165


Invest in Real Estate and Live Rent Free


Starting a business in real estate investment can be daunting. You are using your cash reserves to buy and often fix up, properties. What if you could leverage your purchases by living rent free at the same time? Without your own living expenses, you can use more of your available cash in your projects.

Sound too good to be true? Would you like to know how to do this?

The first step in any real estate investing project is to identify the right opportunity. If your goal is to also live rent free, then the property needs to provide immediate availability for a rental tenant. This could be as simple as an extra room, as long as it provides you enough income to offset your own costs.

A typical option would be to consider a multiple family building. This could be a duplex, triplex or larger. This could allow you to rent out one or more of the units while fixing up the others. In this way you can use your available funds to add value for the investment and not to pay the cable bill.

New investors are often stymied by the aspect of financing a property. Lenders are aware of the increased risk of investment properties and often attaining financing is difficult and expensive. The rules are different for an owner occupied property. As long as you live in one of the units, lenders will treat your purchase as an owner occupied purchase. You might be able to use FHA financing which allows you to get into the property for as little as 3.5% down.

Sound too good to be true?

It’s not, but you do need to do your homework and plan carefully. If the goal is to live rent free, then you have to recognize which opportunities will offer this option to you. Existing leases transfer with the sale, so you need to know if any units are currently vacant and will it fit your needs. Pay attention to other leases coming due as well. An unexpected vacancy can affect your funds for the project as much as an unexpected repair.

If you are considering your first real estate investing buy and flip property, it might make sense to live on the property and live rent free. Living on site, gives you increased awareness of the project itself and allows you to focus on your goals and timelines on a daily basis. Utilizing part of the property or one of the units as your living quarters makes perfect sense. With careful evaluation, you can also offset your own living expenses and live rent free. This maximizes your cash flow for your project. 

Comments (12)

Mike Cooper, Broker VA,WV, MD
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Great advice, Karen. I do this with my office complex. I bought more than I needed and rent the remainder out to others. My company resides there rent free. It can work in residential and commercial real estate. Happy July 4th!

Jul 04, 2017 11:22 AM
Susie Kay
Ultra Real Estate Dallas Fort Worth - Plano, TX
North Dallas Specialist

Well said, Karen Fiddler, Broker/Owner ! Thanks for your post and Happy Independence Day!

Jul 04, 2017 11:31 AM
JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

Great idea Karen. I just joined an investment property owners' group. This would be a great topic to discuss at a meeting.     

Jul 04, 2017 04:05 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Great post Karen, I have used this investment model many times, and when you live in the same building your tenants are always on their best behavior.

Jul 05, 2017 11:04 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Karen Fiddler, Broker/Owner ,

I'm so glad Carol Williams featured your post in her "Second Chance Saturday" series. Great information and advice. It can be done with thoughtful planning!

Jul 08, 2017 04:48 AM
Steve Bracero
Heisler and Mattson - Shrewsbury, MA
First Time Homebuyer and Investor Specialist

Hi Karen Fiddler, Broker/Owner  

Great read! This is how I started investing in real estate myself! It is great for those who can in their current situation 

Jul 08, 2017 10:12 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

There's some excellent information here for those who are considering investing in real estate, with owner-occupancy being a great way financially to get started.

Jul 09, 2017 09:33 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Karen, I hope you are having a fantastic Spring! It's been a while since you've posted. Just wanted to stop and say hello and wish you well!

May 21, 2018 02:44 PM
Dana Hollish Hill
Hollish Hill Group, JPAR Stellar Living - Bethesda, MD
REALTOR * Broker * Coach

Great ideas. I wish I had taken the leap before I had school-age kids. Now it is much harder to move around. I tell all the young people I know to buy/fix up find next property/move/rent out last place, repeat. 

Aug 14, 2018 10:06 PM
Kat Palmiotti
406-270-3667,, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Just checking in! Haven't heard from you in a while; hope you are doing well!

Mar 16, 2019 04:28 AM
Karen Fiddler, Broker/Owner

Hi Kat Palmiotti Nice to hear from you! I'm doing well. Just been focusing on family and working. Youngest has graduated from college, my daughter is married and happy, hoping for some grandkids. 

I hope all is well with you also! Do miss the Rain, low on time though. 

Mar 16, 2019 07:14 AM
MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Hi there,

I've given this same good advice to other clients myself.

Jun 02, 2019 01:20 AM
Kat Palmiotti
406-270-3667,, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Hello there! Thinking of you! I hope family and work are all well. Enjoy the rest of the winter!

Jan 25, 2020 05:43 AM
Karen Fiddler, Broker/Owner

Hi Kat - you are so sweet. I think about AR often and you inspired me to write an update. I need to be here more often! All is well - all good. I hope all is well with you and your family too? Your picture looks GREAT!!

Jan 26, 2020 08:50 AM