fbpx

Main Content

A quick guide to finance an investment property

Buying an investment property is one of the best ways of wealth building. However, when you are planning to buy an investment property, one of the crucial decisions you need to take is financing. There are several ways of financing an investment property. But it is crucial to perform a comprehensive financial analysis of estimated returns on investment (ROI) before making a decision. The financing depends on many factors, such as whether you are buying a residential or commercial property, where the property is located, and so on. Property investment is not an easy feat. Therefore, having an experienced real estate agent by your side can prove to be highly beneficial.

At Vision Real Estate, our agents keep a track of potential properties in prime locations. We are well-versed in assisting clients with efficient market strategies to help them acquire a profitable deal. We take care of all your real estate needs.

To help you make the process of acquiring an investment property a little more convenient, here is a quick guide to establishing promising financing options.

Following are the various financing options you can opt for:

Loans

Taking a traditional loan may not be a convenient method when it comes to buying an investment property. In that case, it is best to explore other loan options such as portfolio loans, commercial loans, or hard money loans. These loaning options help you secure funding from reliable money lenders other than the traditional banks.

Equity financing

It is often easier to get a property equity loan against your existing property. So, if you already have sufficient equity build-up, you might be able to secure funding from a home equity loan plan quickly. It is crucial to consult with a tax advisor to determine the tax deductibility for the equity loan.

Cash Financing

And, of course, if you already have sufficient funding in cash, you can always choose to make an all-cash payment for buying the property. This way, it increases your cash flows (as you don’t need to pay any monthly mortgage or loan installments), interest savings, and you can take ownership of the property with instant equity.

Mortgage

Traditional mortgages granted by financial institutions are still the most popular method of financing. Although mortgages typically don’t apply to investment properties, a mortgage loan might be a great option if you are looking to buy a property and use one of its units for a living while renting the others out.

Private Money Loans

Lastly, there is always the option of private money loans that you can take from any close relatives, friends, or business acquaintances. It is easier to secure a loan from a familiar lender as you can negotiate potentially lower interest rates and a repayment schedule that best fits your requirements.

If you are interested in venturing into real estate investing, there are many things to consider other than financing. You need to consider housing market trends, property taxes, financing requirements, ROI, and much more. Thus, it pays off well to have an experienced property firm on your side to guide you.

Vision Real Estate is a team of experienced real estate agents with over 15 years of experience in property selling, buying, investing, and renting. We are dedicated to helping residential and commercial clients navigate the real estate market and provide excellent property insights to secure a deal that benefits them. If you need property assistance in NY, get in touch with our team for expert assistance.