A Brief Guide to Property Investment Loans

A Brief Guide to Property Investment Loans

Are you looking to start investing in real estate but don’t know where the money will come from?

First things first, investing in property is a savvy decision. There’s a reason over 90 percent of today’s millionaires got their wealth through real estate.

However, buying property is one of the most capital-intensive investments you can make. Without adequate capital, you can’t afford to buy land or a rental apartment, let alone put up an apartment complex. The good news there are property investment loans you can use to fund your dream.

In this guide, you’ll find expert insight into the different property loans available to you. Read on!

Conventional Mortgages

Getting a mortgage is the first thing that comes to mind when you’re planning to buy your home. But you can also use a convention mortgage to make a real estate investment.

The process for getting this loan is similar to that of getting a mortgage to buy your own home. Your credit score needs to meet the lender’s requirements and you’ll need to make a deposit payment.

Once the loan is approved and you’ve acquired the property, you’ll start repaying it, regardless of whether the property is generating an income or not.

Home Equity Loans

Are you a homeowner?

Over time, your home will typically gain more value. And as you pay off your mortgage, you start to gain equity in the home. Equity is what you get when you subtract outstanding mortgage debt from the home’s present market value.

With substantial positive equity, you can approach your lender and apply for a home equity credit facility. This could be in the form of a regular loan or a line of credit.

Imagine a situation where you have $150,000 worth of equity in your home. You can easily access about 80 percent of this value when you get a home equity loan. Add that to the money you’ll raise from other sources and you’ll have enough capital to invest in another property.

Hard Money Loans

A hard money loan is a short-term loan that’s ideal for investors who flip houses.

House flipping is the process of snapping up houses that are available at a discount, making repairs and/or upgrades to boost their value, and then selling at a profit. Click here to learn about house flipping if you’d like to try it!

When you’re a house flipper, you need to be able to purchase a property as soon as it becomes available. Hard money lenders offer the money you need to buy the property quickly, but often at exorbitant interest rates.

You can also rely on private money loans. These are loans issued by private lenders, who can be anyone from a relative or friend to a private lending company.

Make the Most of Property Investment Loans

Property investment loans are a handy financial tool for millions of investors. Whether you’re eyeing a conventional mortgage, home equity loan, hard money loan, or a private loan, there isn’t a shortage of options.

Browse our blog for more investing tips!