Investing in rental properties is one of the most reliable ways to grow your wealth in India. And the best part? You don’t need to be a crorepati to start. With smart strategies and a creative mindset, it’s possible to step into the rental property market even if you have limited capital.
In this guide, we’ll show you 15 practical and proven ways to invest in rental property with minimal money and how you can make your investment journey successful from the get-go.
1. Buy Property with Friends or Family
Co-investing allows you to pool money with others and buy a property together. You split the down payment, ownership, and rental income.
Example: Three friends in Pune chipped in ₹5 lakhs each to buy a 2BHK worth ₹50 lakhs. They now earn ₹25,000 rent every month split equally.
Pro Tip: Always sign a legal agreement clearly mentioning ownership share, rental income split, and what happens if someone wants to exit later.
2. Use a Home Loan to Your Advantage
Most home loans require just 10–15% as a down payment. You can finance the rest with long-term EMIs, making it easier to invest even with limited savings.
Perks:
- EMIs spread over 20–30 years
- Tax deductions on both interest and principal
- Special schemes like PMAY offer subsidies
- Pay in stages for under-construction properties
Pro Tip: Make sure the rental income you earn covers at least 60–70% of the EMI.
3. Look for Auction or Distress Sales
Banks often auction properties due to loan defaults at prices 15–30% lower than the market. These are great value-for-money deals.
Example: A 3BHK in Noida worth ₹85 lakhs was picked up in an auction for just ₹65 lakhs offering great rental returns.
Pro Tip: Check title clearance and pending dues before buying. Auctions are “as-is-where-is.”
4. Use Government Schemes to Save Big
Take advantage of housing schemes that reduce your financial burden:
- PMAY offers subsidies up to ₹2.67 lakhs
- State schemes offer stamp duty concessions
- Affordable housing projects in tier-2 cities and suburbs
Pro Tip: Each scheme has eligibility limits, so check property size and income restrictions before applying.
5. Try Rent-to-Own Deals
This option lets you rent a home now and buy it later, using part of your rent as the future down payment.
Example: A flat owner in Bangalore offered a rent-to-own plan where ₹8,000 of the ₹25,000 monthly rent counted toward buying the home over 3 years.
Pro Tip: Negotiate directly with sellers, especially if a property has been sitting unsold for a while.
6. Use Your Existing Assets
If you don’t have cash, use your other assets like:
- Fixed deposits
- Gold
- Mutual funds
- Stocks
You can get a loan against these assets at lower interest rates than personal loans.
Pro Tip: Compare rates across banks and NBFCs to find the cheapest loan option.
7. Invest in REITs (Real Estate Investment Trusts)
Want to invest in real estate without buying physical property? REITs are your best bet. Start with just ₹10,000.
Benefits:
- Earn regular dividends
- Professionally managed properties
- Easily traded on stock exchanges
- Diversify without high risk
Example: Embassy REIT gives you a share in commercial real estate across Indian metros without the hassle of ownership.
8. Rent Out Your Existing Home
Moving cities or upgrading homes? Rent your current one instead of selling.
Pro Tip: This generates steady income and lets your old property grow in value. Use that income to pay EMIs on your next home.
9. Raise Funds from Private Networks
If banks say no, try private lending through:
- Friends or relatives
- Real estate investor groups
- Angel investors
Example: A group of 10 people in Chennai each invested ₹5 lakhs to buy a commercial space, earning ₹40,000 monthly in rent.
Pro Tip: Even with friends, always document the agreement legally.
10. Go for Seller Financing
Sometimes the seller is willing to let you pay in parts instead of taking a bank loan.
Advantages:
- No bank involvement
- Flexible terms
- Smaller down payments
- Faster deal closure
Pro Tip: Hire a lawyer to draft the agreement and protect both sides legally.
11. Flip and Fund Your Rental Purchase
Buy a rundown property, renovate it, sell at a profit and use that profit to buy a rental unit.
Example: An investor bought a 2BHK in Mumbai for ₹65 lakhs, spent ₹10 lakhs on renovation, and sold it for ₹90 lakhs. The ₹15 lakh profit funded two rental flats.
Pro Tip: Focus on simple fixes painting, flooring, and bathroom upgrades. Avoid structural changes.
12. Live and Earn (House Hacking)
Buy a bigger property, live in one part, and rent out the rest.
Options:
- Rent a floor in a duplex
- Set up PGs
- Lease rooms to working professionals
Example: A buyer in Hyderabad lived in one room of his 3BHK and rented two others for ₹12,000 each paying 80% of his EMI through rent.
13. Use Your Home Equity
Already own property? Use it to take a loan against property (LAP) to buy a rental unit.
Perks:
- Lower interest than personal loans
- Bigger loan amounts
- Flexible repayment terms
Pro Tip: Make sure the expected rent from the new property covers the EMI of this loan.
14. Take Over the Seller’s Loan
If the seller has a home loan, you can take it over (if the bank allows), reducing your upfront payment.
Example: A buyer in Kolkata assumed ₹45 lakhs of the seller’s home loan, needing only ₹30 lakhs in cash to close the deal on a ₹75 lakh home.
Pro Tip: Get all permissions from the lender before proceeding.
15. Invest in Affordable Areas with High Returns
Instead of overpriced metros, look at smaller cities or suburbs with rising demand.
Top picks:
- Indore, Jaipur, Chandigarh, Nagpur
- Thane, Sohna (Gurgaon), Kompally (Hyderabad)
- Areas near IT parks, colleges, or highways
Example: An investor bought a 2BHK in Kochi’s IT zone for ₹35 lakhs with a 5.5% yield—higher than Mumbai’s 2–3%.
Bonus Ideas to Build Your Real Estate Portfolio
- Start with a small commercial unit or shop in a good location.
- Buy land in developing areas then build and rent in the future.
- Consider fractional ownership platforms that let you invest in luxury commercial properties with ₹25,000–₹1 lakh.
Our Take at Latest In Real Estate
We believe real estate investing in India is becoming more accessible than ever. The key is to start small, be informed, and stay consistent. With rising demand in tier-2 and tier-3 cities, now’s the time to take your first step even if you have limited funds.
Whether it’s a REIT investment, a co-bought flat, or a flipped house start with what’s within your reach and build from there. The sooner you enter the market, the sooner your money starts working for you.
Conclusion
You don’t need big money to start investing in rental property in India. With the right strategy, planning, and some smart research, you can begin building your rental income portfolio with very little capital.
Start by picking one strategy that fits your budget and goals, whether it’s co-investing, taking a home loan, or buying in emerging cities. With patience and consistency, you can grow your property investments and build lasting wealth.
FAQs (Frequently Asked Questions)
1. What is the minimum amount I need to start investing in rental property?
You can begin with as little as ₹10,000–50,000 via REITs or co-investment strategies.
2. Are rental properties still a good investment in 2025?
Yes, especially in growing cities where job markets and rental demand are strong.
3. Can NRIs invest in rental property in India?
Absolutely. NRIs can buy most types of property but must follow FEMA rules and tax norms.
4. What kind of properties are best for rental income?
2–3 BHK flats near offices, colleges, or transport hubs tend to attract stable tenants.
5. How much rent can I expect from a typical 2BHK?
Depends on the city and locality—rental yields in top cities range from 2% to 5%.
6. How do I estimate rental income before buying?
Check similar listings online, consult agents, or look up rental history in the area.
7. What about maintenance costs for rental properties?
Keep aside 10–15% of your rental income for regular upkeep and repairs.
8. Can I get a home loan without a big down payment?
Yes, with schemes like PMAY or by negotiating with the seller or using co-ownership.