The Best Tips of How to Become a Landlord With No Money

how to become a landlord with no money

Investing in real estate can be one of the best passive income ideas if you do it right. You do not need to form a group to do this considering that 70% of rental properties in the United States are owned by individual investors. 

However, one thing that you may feel could stop you from becoming a landlord is the fact that you don’t have enough money to put up capital. 

What if there was a way to do that without currently having enough money? This is how to become a landlord with no money. 

Renting Rooms in Your Home

One of the easiest ways to become a landlord with no money is if you have rooms to spare in your home. One thing that you can do is if you buy a bigger space or suddenly find yourself with a spare bedroom, you can rent that room out to a tenant. 

Then, you can collect that rent monthly and use it towards your own bills for the house. This can be anything from monthly mortgage payments to utilities and property taxes. 

The best part is this type of arrangement does not require any capital from you. It only requires that you give up some privacy in your own home along with some space in your home. Since you’re likely going to be sharing some of your space with this person, you may want to take a little extra time to screen your potential tenants in this situation. 

You could be someone on the older side with kids that left the nest. Or, you simply found a good deal on a home that has more space than you need. 

Take advantage of your new situation and receive a little extra funding for your home with this arrangement. 


Another way that you can become a landlord without any money is if you find a co-signer to sign the deed to the real estate property with you. For those of you who don’t know, a co-signer is someone who agrees to become legally responsible for the loan in the event that the primary owner fails to pay any portion of the loan. 

Considering the amount of risk that a co-signer has here with very little to gain, most people would likely be hesitant to do this type of arrangement. That is why it is going to have to be someone very close to you and someone who trusts you. Examples of this can be parents, siblings, extended family members, close friends, and more. 

Think about who you are close with and who might trust you enough in your social circles to put their name on a legal document of this nature. 

Home Equity Loan 

If you currently own a home, you are sitting on a big financial asset as it is. Assuming you have no other working capital to put up for a down payment on new real estate property, it may be best to borrow money against your home. 

You can do this by simply borrowing money against your home. In this type of arrangement, your home has a certain worth. This can be used as a credit line when you need to make large purchases such as this. 

The risk of doing this is that if you fail to pay the credit back, you essentially just put your home up as collateral. At a minimum, a lender could put a lien against your home until that money is paid back. However, depending on how much money you borrowed against your home, it could mean that you lose the home entirely. 

Think hard about this before risking the roof over your head for a new business venture. 

Recruit a Partner 

An alternative to finding a co-signer mentioned above could be making someone a full partner with your rental property. You could come to an agreement that you will offer a percentage of your shares of the property in exchange for the capital needed to lock down the property. 

Then, it is likely that you’re going to have to manage the actual property while the other person is the one who funds the project. 

Depending on what area and what real estate you want to invest in, this does not have to be limited to just family. There could be a real estate investor who is also interested in this project but may not want to operate the property alone. That could be a good opportunity to form a partnership. 

Another thing to consider is if the same family members you may have asked to be a co-signer want more stakes in your investment. They may agree to give you the money with the condition that they become a full partner with your rental property. 


Finally, you have the option of asking multiple lenders for the capital that you need. In this situation, you will likely need two different loans. You will need a traditional mortgage loan as well as a personal loan to come up with the down payment. 

There are a few factors here that can help you qualify for these loans and even get better terms. These include what your recent employment history is, how much your salary is, how much money you need to borrow, what your average credit score is, and more. 

The average credit score in the United States is 714. So, if you have something higher than this, you could get a lower interest rate for this loan. However, if you have a credit score around 500, you will likely either get bad loan terms or not get approved at all. 

Know How to Become a Landlord With No Money 

This is how to become a landlord with no money. If you’re asking family members to back you up, you will either have to make them a co-signer or a partner. You could ask a lender to come up with the money or you can simply skip buying more property and rent out extra space in your current home. 

Do you need help with landlord responsibilities? Message us here to see how we can help.