Applying for a rental loan is one of the most stressful parts of being a real estate investor. As borrowers, we need to help the lender build a fair picture of our finances. That means we must provide a lot of documentation (read: proof of our financial status).
A well-maintained rental property can be a lucrative long-term investment that provides you with a steady source of income—so long as it’s financed the right way. Here’s what you need to know about the financing options for a buy and hold rental investment.
One of the most important ideas to keep in mind is that tenants are not homeowners. Even the best of tenants do not have the same feeling for your rental property as the home they will own in the future. Providing a temporary home that is clean, inviting, and easy to maintain fits the bill for most rental renovations.
A rental loan is a type of loan that real estate investors will apply for when they are seeking financing on a long-term buy and hold rental investment. Investors interested in becoming a landlord will pursue a property that they can purchase and keep as a rental. Rental properties come with the potential for earning monthly cash flow from tenants, building wealth, appreciation, and expanding one’s portfolio of investments.
If you’re looking for a sound investment that yields a good monthly return, chances are you’re thinking about investing in a residential rental property. However, not all properties are created equal, and if you don’t know what your prospective tenants want, your investment could easily become a money pit. Here are 10 factors to consider when evaluating a property’s potential as a rental:
Flipping homes isn’t the only way to make a profit on real estate. In fact, purchasing a buy and hold investment property can be a less risky and much more profitable endeavor. Instead of depending on a quick post-rehab sale to turn a profit, your initial investment accumulates value over time.