3 Steps to Build Wealth With Rentals in 2025

By Kyle Koller

Producing Branch Manager of UMortgage West - The #1 Producing Team at UMortgage

Do you feel like buying rental properties is out of reach because you’d need to save up 20% down every time? That’s one of the biggest myths holding people back from real estate investing. The reality is that you don’t need massive savings.

I’ve seen clients repeat this every few years and end up with a rental portfolio built on purpose, not by accident. Each home adds income, appreciation, and equity, and it all starts with just 5% down on the next purchase. Here’s how it works and why it’s such a powerful strategy.

1. Keep your current home. Instead of selling it, rent it out. Tenants cover the mortgage, and the qualification process is straightforward. A rent roll appraisal shows what the home could realistically rent for, and once a lease is signed and a deposit is in place, that income can count toward your qualification numbers.

2. Buy your next home with 5% down. Since you’re buying a new primary residence, you’re not stuck with the 20% down required for investment properties. Conventional loans require just 5% down, and can be as low as 3.5% for Federal Housing Administration (FHA) programs, which makes it easier to keep growing without saving massive down payments each time.

3. Repeat the process to build real wealth. Every time you upgrade, you keep the old property as a rental and buy the new one with 5% down. Over time, you stack properties, each generating cash flow and building equity, while continuing to move forward with new homes. This intentional cycle builds long-term wealth, one house at a time.

This isn’t just a side strategy; it’s one of the most intentional ways families are building wealth through real estate. By keeping your old home as a rental, using a rent roll appraisal and signed lease to qualify, and purchasing your next home with just 5% down, you’re creating a portfolio step by step. With the right team, the numbers can be mapped out so you know exactly how it works for you.

If you’ve been curious about building wealth through real estate, or you have questions about how to get started, reach out at (801) 687-2018 or kkoller@umortgage.com. I’ll help you run the numbers and see how this strategy could work in your situation.