Here’s a question: Is real estate investing only reserved for a small percentage of “fat cats” who were born into money or is the “average Joe” able to participate in portfolio building? Of course we know that people of many income brackets participate in real estate every day.
The question is: Can people on a limited income buy investment real estate? The answer is… yes! Now of course that answer comes with an asterisk as there are many factors which contribute to a successful purchase.
Earlier in my former life as a professional musician, I was told if I could master the art of playing jazz music, then every other kind of music would be easy to learn. This proved to be exactly true and I enjoyed a long career mastering many styles of music. By the same token, if we can understand how to acquire real estate with an extremely limited income, we can probably become very successful when we have a larger budget to work with.
Let’s put this theory to the test and see if someone on minimum wage can successfully purchase real estate. Minimum wage earners at the current Canadian average of $10.25/hour make about $21,320 annually. This can be challenging when looking to qualify for a mortgage, however it is possible… you have to pick the right property and be suitably prepared for financing.
Let’s build a few scenarios outlining what anyone, including a low income earner must undertake to be properly positioned for both mortgage qualification as well as options available to build more portfolio.
I have seen numerous financial portfolios of real estate investors over the years through my work as a mortgage broker. One of the most common factors contributing to an investor’s inability to acquire more property comes down to lack of financial preparation and presentation for a lender.