An investment property is real estate that is not considered a primary or secondary residence. It’s a piece of property that will not be occupied by the owner. Instead, the investment property is purchased in order to generate a profit, either through a future sale, rental income or both.
An investment property can be a long-term commitment or a short-term commitment, such as “house flipping”, where a home is purchased, renovated, and then sold at a profit. The needs of real estate investors are different from a typical home buyer, so working with a lender who understands your goals is beneficial.
There are specific criteria that borrowers need to be able to meet and choosing the wrong kind of loan can impact the success of your investment, so it’s very important that you understand how the various alternatives work before approaching a lender.
When you purchase investment properties, the financing guidelines are different from traditional loans and they also offer additional benefits:
Rental opportunity: With investment properties they can provide income and you may even profit from your rental property!
You can diversify your portfolio by owning an investment property.
Financing Your First Investment Property
General Documentation Requirements
(can be completed after you’re pre-approved for the loan)
Tips for Investment Property Loans
Remember that an investment property is any property, house, building, or piece of land that you purchase in order to earn a return on your money. Investment properties are not occupied by the owner.
While buying real estate has historically been a solid investment, it’s not a guaranteed one.
Whether it’s a home, condo, or townhouse, give some serious thought to how long you’re prepared to own this property. Most experts have generally stipulated that it takes as many as seven years before the upfront costs associated with any mortgage.
To lean more about the Investment Property and the Loan Application Process talk to Elite Commercial Lending dba Elite Residential Lending.
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