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Investment Property

5 Smart Tips For Buying An Investment Property

5 mart tips for buying an investment property

5 Smart Tips For Buying An Investment Property

Whether you want to buy a home that doubles as an investment property where you live in one unit and rent out the others to reduce your mortgage payment or you want to strictly buy a property for investment property to earn income from it, these tips are for you.  Many are realizing the benefits of buying and holding investment properties for their rental income potential.  The tips in this article will help you make sure your investment is a sound purchase that provides you with income for years to come.

1.  Get Pre-Approved Or Have Your Cash Ready Prior To Buying An Investment Property

Buying a multi-family with four or fewer units allows buyers to use conventional mortgage financing, whereas investors wanting to buy buildings with more than four rental units will require the use of commercial financing.  Commercial financing usually comes with more restrictions and less favorable terms compared to conventional financing.  With conventional financing borrowers can get 30 year fixed loans and only need to put at most 25% down for a non-owner occupied property.  With commercial financing borrowers will be required to put 30% or more down and may have loans with a 20 year or shorter term.  Additionally commercial loans will have higher credit requirements, may be stricter with the requirement of showing actual investment management experience and/or offer variable rate loans only. 

If a buyer is wanting to buy a multi-family home and live in one of the units then the requirements can be even lower than a non-owner occupied mortgage.  Investors who intend to occupy...

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