Interested in Investment Properties? Five Things You Should Know
In today’s financial climate, investing in the stock market can be an uncertain venture at best. For this reason, many investors are looking to the real estate market as a fairly reliable, steady of passive income. To be certain, investment properties can have lucrative returns. However, most buyers simply don’t have the cash necessary on hand to purchase a rental property outright. All but the most established rental property investors will need to finance an investment property. Even if you’ve already undergone the process of securing a personal mortgage for your own home, you’ll find some significant differences when it comes to financing investment property. Learn a few key tips regarding procuring financing for your investment.
1. Prepare a Significant Down Payment
Unlike traditional home mortgages, which may allow mortgage insurance in exchange for a relatively low down payment, investment properties do not qualify for mortgage insurance. For that reason, you’ll likely need at least 20% down to secure financing from a lender. However, that 20% is on the low end of the spectrum; the more you can contribute to the down payment, the better.