Two millennial founders share how they invest in real estate for financial stability while building their own businesses

• It can be helpful for founders to have outside investments due to the risks of entrepreneurship.
• Real-estate investments can help business owners find financial stability if done correctly.

When Mallory Rowan and her partner decided to move homes, they kept the house they were leaving and turned it into a rental property. Rowan, a startup founder, believes it's important to have other sources of income when taking the risk of starting a business.

"If I'm just paying myself a salary and I get to a point where that business isn't working or I need to take a break, I haven't really gotten further besides that I've learned things," Rowan said, referring to financial growth.

Rowan, 29, is the founder of Rowan Marketing, a business-building platform she launched in September 2018. Since many founders take a lower salary to fuel their businesses or live sale-by-sale as their companies grow, she said that investing in opportunities that will be beneficial in the long run, like real-estate properties, can help them become financially stable.

"The more my business succeeds, the more I am able to invest in my future self," Rowan said. "That gives me the security and freedom to be flexible in the career choices I make."

Rowan and another startup founder, Lisa Andrea, who also uses real estate to supplement her startup earnings, revealed their best tips for investing in real estate as business owners.

Take it slow

Both Andrea and Rowan said that investing should not be an additional stressor. To combat the stress, Rowan takes a slow approach to her real-estate investments.

She currently owns three properties: one where she lives full time, another that she rents to tenants, and a third that she recently renovated and plans to operate as a rental business in the coming months. She's built her portfolio gradually, without overshooting her investments, she said.

Rowan didn't go on a homebuying spree, but is slowing adding to her real-estate investments. For now, she's using the rental income from the second home to help offset her mortgages and renovations. Down the line, if she decides to sell the property, she hopes it will be worth more than it was when she purchased it.

Such patience might actually be a good idea in the current environment. Prospective buyers are having to navigate a difficult combination of surging demand and limited inventory, which has pushed home prices higher. Mortgage rates have also stayed stubbornly high after hitting multi-decade peaks.

It's OK to start small

Rowan said her slow approach to real-estate investing is attractive to millennials, who have a lower rate of homeownership compared to previous generations. Since many can't afford to buy a house, they may want to start with smaller properties, such as apartments.

This also applies to Rowan. She said her third house will be her first attempt at a revenue-generating property. But generating that additional income is not the only benefit to the cottage: Rowan and her partner hope to keep it in their family for generations.

"We're not at a point where we can just pay for a cottage on our own, so we're turning it into a business for now and then it gives us options," she said.

Try low-cost opportunities first

Andrea, 34, the founder of The Financial Cookbook, a financial education blog and online platform, offers her readers nontraditional ways to get involved.

She suggests using companies such as Fundrise and DiversyFund, which allow people to invest as little as $100 into real-estate properties and generate a percentage of their investment when the property earns money. However, founders should do their due diligence on these platforms to ensure the fees and costs make sense for their budgets.

"If you're investing $100, you're not going to make a huge return, but you're still going to make the same percentage as the person that invested $100,000," she previously told Insider.