Investment properties have many benefits when it comes to generating income and building long-term wealth, just remember that this wealth is not always as predictable and guaranteed as you would like.

As a means of diversifying your income across different asset classes, real estate investment is typically less volatile than shares in stock. In the past investors rush to real estate when stocks and other investment vehicles suffer. While investing in real estate has lost some of its luster, sensible investments in property still have many attractions and should be considered as part of a diversified investment portfolio.

However, before you can start investing in property you have to have the funds to do so. This is where an investment property loans can help you leverage your current assets. As long as your real estate property brings in more money than your mortgage payment (PITI), generally you are in good shape and can grow your equity in the property.

Down Payment and more...

Purchasing investment property requires more down payment than a primary residence, typically ranging from 20-30%. Loan programs include adjustable and fixed rates loans. Interest rates on investment property average about 1/4% to 1.5% higher than a primary residence loan.  The range is dependent on the property being owner occupied or non-owner occupied, number of units, down payment, credit score and how title is held on the property. Some investors prefer to hold the property under a corporation or LLC, which can increase the interest rate. This method offers additional protection to the property owner and generally out weighs the rate increase.

Foreclosed property can provide a low entry price into the market and get you on your way to building long-term wealth. Remeber rental property has its headaches and is not always easy. Do your homework on income and expense for each property.

Current market conditions make this type of purchase attractive and if you would like to learn more, contact Tim Zemanovic at 952-224-2424.