Investment Property
Investment properties can provide long-term residual income and equity gains, or yield more short term returns in larger amounts depending on your goals and strategy. If you are considering purchasing investment property in Des Moines, IA or Boise, ID you can learn more about the different types of real estate investing below or contact us for a free consultation.
Types of Real Estate Investments
*Always consult your lender or financial advisor for financial advice and your accountant for any tax implications.
Long-Term Rental - LTR
LTR's are a single or mutli-family residence that is rented to a tenant for an extended period of time, typically a year or more.
One of the more common types of investment properties, it is easy to transition a first home or personal residence to a long-term rental.
If purchasing a property for the purpose of renting it out, most financial institutions require at least 20% down, but don't factor DTI, as the rent factor or estimated rent amount is used to offset the mortgage payment.
Short-Term Rental - STR
Short-term rentals are properties rented out for short periods of time on popular sites like Airbnb or VRBO for a single night or up to 30.
STR's have become increasingly popular as a real estate investment option, and can do considerably well in vacation hotspots or even rural areas with little to no hotel options.
Financing for STR's can be somewhat more challenging, and many areas have restrictions or permitting requirements so it's important to do your research prior to buying property for this investment strategy.
Fix & Flip
A fix & flip investment property is a way to gain faster equity and cash out in a shorter timeframe. It is risky if you don't have the time or resources to take on the required work.
The best returns for this type of property typically come with doing the bulk of the work yourself if you have the ability. If you go the contractor route, there are loan options that will finance the remodel portion.
There can be different tax implications on short-term gains for this type of property so be sure to check with your accountant.
BRRRR
Buy, renovate, rent, refinance, repeat - known as BRRRR in the real estate investing world. This is a way to leverage your initial investment for more than just one property.
A variation on the fix & flip investment, this is investing in a fixer-upper that you hold and rent out once work is complete, then refinance to tap into the increased equity from renovating. Using that equity, you turn around and do the same thing again.
This is a good option if your long=term strategy is to grow your real estate portfolio over time.
Real Estate Investment Loan Options
If you are ready to make an investment decision and are not already working with a lender, contact us for a list of lenders who work specifically with investors.
