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Interested in Financing a Rental Property? Here's How To Do It Today

Richard Advani

Updated: Jul 4, 2024

Introduction

Are you considering investing in real estate? Whether you’re a seasoned investor or a first-timer, financing a rental property can be a smart move. Let’s explore why it’s worth considering and how you can make the most of this opportunity.


Why Finance a Rental Property?

1. Long-Term Wealth Building:

  • Real estate has consistently proven to be one of the best long-term investments.

  • Even during major recessions, property values have continued to rise, as demonstrated by the S&P Case-Shiller US national price index.

  • The 2008 crash was an exception, where real estate played a significant role in the economic downturn. 2. Enhanced Returns with Rental Property Loans:

  • While real estate alone is a great wealth builder, pairing it with a rental property loan amplifies the benefits.

  • Here’s how:

  • Access to Fixed Rates: When you finance a rental property, you gain access to long-term fixed rates (e.g., 30-year fixed mortgages). These rates act as a hedge against inflation.

  • Participate in Market Growth: By financing, you don’t need to deploy all your capital upfront. Instead, you can take part in the overall growth of the real estate market.

  • Example: Imagine purchasing a $300,000 home with 20% down ($60,000). If the market appreciates by 10% annually, your investment grows alongside the property value.

Conclusion

Financing a rental property allows you to leverage your capital efficiently and benefit from both real estate appreciation and rental income. Consider your financial goals, explore loan options, and take advantage of this wealth-building opportunity today!

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