Using a HELOC to Invest in a Real Estate in 2025

Updated ·2 min read Expert verified
Written by Calbrea
Reviewed by Tunita Bailey

By accessing the equity in your home, you can access flexible, low-interest funds to secure a rental property, fix-and-flip a house, or invest in short-term rentals.

What You Need to Know About Investing in Real Estate with HELOC

Thinking about investing in real estate? A Home Equity Line of Credit (HELOC) could be your secret weapon. Unlike other loans, most banks let you decide how to use the money — but it’s crucial to borrow wisely.

The key takeaways

  1. Have a clear repayment plan to manage risks and avoid jeopardizing your home.
  2. Use HELOC funds strategically to grow wealth, not on things that lose value.
  3. HELOC's allow you to act quickly on investment opportunities with fast-access funds.

How You Can Use a HELOC to Buy Rental Property

Jasmine Grainger, a homeowner and investor, shares her story:

“I used a HELOC to make a down payment on a rental property. It was during my 2.99% intro rate period, so it was a no-brainer. Having fast access to funds allowed me to make a competitive offer and close quickly. Within 6 months, the rental income covered my HELOC payments, and I was able to refinance into a traditional mortgage, which freed up my HELOC to invest more.”

Grainger’s ability to act quickly turned her home’s equity into an additional income stream.

» NEXT:Start Estimating Your HELOC Payments Now

Why Use a HELOC to Invest in a Rental Property?

If you became a homeowner before 2019, you likely have built up a ton of equity. A HELOC allows you to tap into your equity, which can be a powerful tool to invest in real estate. Most people don’t know that many banks allow you to use the funds for anything you choose. The real question is: will you use it to build wealth or spend it on things that lose value, like cars or clothing? With a strategic plan, your HELOC can help you generate additional income and grow your net worth.

» NEXT: Learn More about how a HELOC works here.

Creative Ways to Use a HELOC for Real Estate Investing

1. Renovate a Rental Property

You can use your HELOC to repair a rental property instead of a credit card or a hard-money loan. Rental income can cover the mortgage and repay your HELOC.

2. Fix-and-Flip Strategy

Buy a fixer-upper, use HELOC funds for renovations, and sell it at a profit. Then, pay off the HELOC and pocket the gains.

3. Short-Term Rentals (Airbnb or VRBO)

Invest in a property in a popular area and rent it out on Airbnb. Short-term rentals can generate higher income, helping you pay the HELOC faster.

Key Benefits of Using a HELOC

Quick Access to Funds: Unlike traditional loans, a HELOC allows you to act fast when opportunities arise. Lower Interest Rates: HELOC rates are often lower than credit card or personal loan rates, especially if they offer a promotional introduction rate and allow you to lock in a fixed rate on a portion of the balance. Revolving Credit: As you repay, you can reuse the funds for future investments.

» NEXT: Start Estimating Your HELOC Payments Now

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