Advertiser Disclosure

advertising disclaimer
Skip to main content
Money in Woman's Wallet

5 Smart Ways Real Estate Investors Can Use the Second Stimulus Check

Jan 05, 2021 by Aly J. Yale
FREE - Guide To Real Estate Investing

Take the first step towards building real wealth by signing up for our comprehensive guide to real estate investing.

*By submitting your email you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.

Congress finally approved a second stimulus package, and many Americans have already received it. Though the checks amount to just half the benefits seen last March ($600 versus $1,200 per person), they're still helpful nonetheless. And if you have dependents, you can expect even more in your bank account.

For real estate investors, these funds can offer a much-needed boost as we head into the new year. Use them to improve your short-term rental, increase the value of your next flip, or even whittle down that mortgage debt if you have it.

Not sure how to best use your stimulus check? Here are five smart strategies to consider.

1. Make an extra mortgage payment

Do you have a 15- or 30-year mortgage on one of your rental properties? Still have a mortgage on your own primary residence? You can use your stimulus money to make an extra payment (or two) on your loan.

You'd be surprised at the difference just a few extra payments can make. On a $200,000, 30-year loan at a 3% rate, making a single additional $1,000 payment would actually save you nearly $1,500 in long-term interest. It'd also shave three months off your repayment timeline.

2. Update your short-term rental -- and make it more COVID-19-friendly

If you have short-term rentals, consider using your funds to revamp the properties. Add an extra bed or two (a bunk bed, perhaps) and adjust your nightly rate accordingly. You could also install a deck or fire pit for some after-hours entertainment or upgrade the locks and thermostat to smart versions.

Another option? Make the home more COVID-19-friendly. These days, many people are traveling to get away from the confines of their homes and just change up their scenery. They're still isolating but doing it elsewhere. For these reasons, they want properties that offer it all: a clean, sanitary, and comfortable environment; great spaces to cook, eat, and sleep; and entertainment for all ages -- smart TVs, gaming systems, board games, etc.

You should also up your Wi-Fi speed if you haven't already. With many travelers working remotely, they'll need reliable, fast connections in order to have a satisfactory experience.

3. Add another renovation to your next flip

In the midst of a flip? Use the funds to make the home even more marketable. Add a home office and install soundproofing for those remote workers, upgrade the sinks to touchless faucets, or add a backyard deck or patio (Remodeling's cost-vs-value report says wood is best).

Just make sure you choose the projects carefully (some can actually take away from your home's value), and don't overimprove the home. You want it to look great, sure, but it should also fall in line with the other properties in the neighborhood. Otherwise, you'll have a very difficult sale on your hands.

4. Invest more into marketing -- or just more help

Spending your stimulus money on marketing can be smart, too. Use the cash toward direct mailers and snag some pre-foreclosure deals in your neighborhood, or invest a few dollars into Facebook (NASDAQ: FB) and Google (NASDAQ: GOOGL) advertising to bring in more leads.

You could also use the funds to do a little outsourcing. Bring in a property manager, hire an accountant, or just find a virtual assistant who can help with overflow tasks. Freeing up your own time will allow you to be more productive and successful in the long run.

5. Use it toward a new investment

Finally, if you're thinking of expanding your portfolio this year, use the stimulus money for that. Put it toward the down payment or closing costs on a new property, or use the funds toward a real estate stock, real estate investment trust (REIT) purchase, or crowdfunded deal.

There are dozens of ways to invest in real estate, and a nice infusion of cash -- even just $600 of it -- could help get your foot in the door for any one of them.

The bottom line

Those stimulus checks may not seem like much, but if used the right way, they could help you grow your business -- and your profits -- in the new year.

Still not sure where to put the money? Here are 10 strategies for investing in real estate.

Unfair Advantages: How Real Estate Became a Billionaire Factory

You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why.

But those barriers have come crashing down - and now it’s possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you.

To get started, we’ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Simply click here to learn more and access your complimentary copy.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Aly Yale has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool has a disclosure policy.