Updated: Dec 28, 2022
Are you an HGTV enthusiast who is intrigued by the idea of buying some property, fixing it up a little, and selling it at a profit? Are you a professional real estate investor who has been spending years creating your investment portfolio with real estate flipping or earning passive income through rental property? In either case, whether you are a seasoned professional or a newbie who wants to give real estate investment a try, investment property mortgages are a primary concern for you.
Even non-real estate folks these days know we are in a housing market bust. Foreclosures are on the rise, sales are down, unemployment is up, fuel and cost-of-living expenses are skyrocketing; all of these issues are a big concern for all investors well, for all people, regardless of whether they are investors or not, actually. And all of these economic factors are affecting investment property mortgages.
Just a few years back, it was not uncommon for banks to be tripping all over themselves to get the real estate investor to use their services. One-hundred percent investment property mortgages were not uncommon. In fact, they were readily available everywhere.
Now, however, it can be trickier to secure the investment property mortgages you would like. Banks and other lenders are tightening up on the restrictions, and it is nearly impossible to get a 100% loan anymore. One-hundred percent loans are those most likely to end in foreclosure, after all.
The banking industry caution, however, is not necessarily a bad thing for the real estate investor. In fact, it can be beneficial. The best thing you can probably do for yourself if you are going to continue investing in real estate is to be conservative enough in your practices to be successful even in a tough economy.
When deciding on your investment property mortgages, the best thing you can probably do is help ensure that your goals are going to be met when you actually make the purchase, rather than when you sell the property. What do I mean?
When you purchase with the intent to sell at a profit, you should not count on a huge asking price making you the return you want. Instead, you should focus on what you pay for the property and the terms of your investment property mortgages. Look for built-in equity in your properties. If your property is purchased low, with equity already a part of the deal, your chances of success are better, and your ability to get a favorable investment property mortgage is better, too.
One of the basic principles of any investment is buy low, sell high, right? Well, we are definitely not in a sellers market right now, which is the perfect time to buy low. So, if you are deeply troubled over your decision to become a real estate investor, fear not. With the right strategies, due caution, and the right investment property mortgages, you can make it through this tight market and achieve your investment goals in the future.