WHAT IS AN INVESTMENT PROPERTY?
While a residential property would be regarded as one’s primary property, an investment property is a secondary residential property purchased with the intent to generate revenue through the future resale of the property, rental income, or both. The investment property can function as a long-term project or an intentional short-term investment. For example, In the event of flipping, the real estate is purchased, remodeled or renovated, and then sold for a net profit.
DO INVESTMENT PROPERTIES QUALIFY FOR LOANS?
Yes. In comparison to homes purchased as the primary residence, taking out a loan for an investment property often comes with higher interest rates and a larger down payment. It can be difficult to receive a loan on an investment property, so the borrower must be prepared to put down at least 20% of the home price as a down payment and be able to prove good credit scores.
TIPS FOR INVESTING IN A PROPERTY:
Purchasing at the right price is absolutely essential when selecting your real estate investment property. Your goal is to select a property that will likely increase in value and yield the highest profits. Since this is the most important decision you will make in the investment process, it is important to be patient and well-informed about the current market conditions and property value trends.
We highly recommend having a professional and reputable building inspector perform a thorough inspection of the property to find any potential problems or conditions that may influence your profiting potential. It is recommended to do an in-depth inspection annually to maintain the property and remain up-to-date on the condition of your investments.
Investment properties are usually accompanied by interest rates that are notably above average. Investors should be prepared to put down at least 20 percent of the property price as a down payment on the loan and ensure that your credit remains in good standing.
Contact Lending Corner today for any interest in becoming involved with investment property or investment property loans!
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