The goal for many of us is financial freedom. Investment properties bring rental opportunities, ongoing income, potential tax benefits and a boost to your investment portfolio. Likewise, having a second home on the beach or in a vacation area offers many potential rewards.
A few things to consider before buying a second home:
- Added financial responsibilities in addition to the mortgage, such as homeowners association dues, cleaning services, flood insurance and utilities.
- How the lender will designate the loan (second home vs. investment property).
A few things to consider before buying an investment property:
- Ongoing income from rental.
- Loan requirements depending on how you’ll use the property (second residence or investment property).
- Tax benefits depending on if you rent the property or take a loss. (Always consult a tax advisor.)
- Understanding the real estate market and the area in which you are investing in (doing your homework).
Loan requirements, as investment property loans typically have higher interest rates, require larger down payments and have different underwriting requirements than properties occupied by their owners. Make sure to consult with one of our Mortgage Loan Originators before making an offer on an investment property.
