The original path of buying an investment property is to save money for down payment, after which you can now get a mortgage to cover the rest. Nonetheless, that’s not the only path to take. Most at times, questions are been asked by landlords on how they can finance a rental property if they don’t have enough money in the bank for a down payment. Here are some strategies to consider;
- Seller financing. This has to do with getting a loan from the person you which to buy the property from. This has been a rear case in that the seller might decide to finance either the down payment or the full purchase price. Again, the seller might still be another investor or can still be the property live-in owner. Note that the best way to attain success is to agree on a fair interest rate for the loan.
- Being in partnership with someone who has enough money for down payment is also another great idea for financing a rental property. This idea works more effective if you have a family or friend who has the interest in property investment but might not be interested in the day-to-day work of screening tenants and to collect rent payment. In this situation, what usually happens is that one person puts in money while the other engage in the actual work of being the landlord. To succeed in such a situation, there is a need to be an agreement on how to split the proceed. Your partner might engage in taking all the financial risk while you are putting in the research in bringing forth revenue through rent.
- Retirement accounts. Most of the people who change their jobs frequently or are self-employ for any period have retirement money in IRA. You could be allowed to invest in non-traditional assets if you have a self-directed IRA, implying that something other than stocks or mutual funds. It is advisable to contact your CPA first if you that that direction. With the help of software that makes it easier to be a landlord, real estate deals more with hands-on investment as compared to anything in the stock market. It is important to get ready to invest the time and energy before you take a plunge, to see a valuable return on investment.
If you’re looking to start investing, we will help you through the whole process and help you determine the best way to finance the property. That may be through our company, or may be one of the methods listed above.
Contact us today!