How do you go about buying an investment property?

RobinNicole

DH and I are thinking about buying an investment property, but honestly I have no idea how to go about it. How does this work when you already own a house and technically couldn't afford another mortgage without the tenants paying most of the mortgage on the investment property? Any advice or information? TIA!

MilesOfSmiles

When DH and I were considering buying an investment property, we learned three things. 1) The interest rate is, on average, a LOT higher, 2) your credit typically needs to be better then an average loan when you own more than 1 house, and 3) a down payment is usually required. We ended up selling our condo and buying a 2 family home which we live in (wow, what a dream, I can't tell you how amazing getting that $ every month from our tenants is) but we -almost- owned two homes. We're thrilled with our decision to live in our modern duplex and sell the condo, as we can keep a good "eye" on the tenants, and upkeeping (and paying for) two properties isn't an issue. GOOD LUCK, if you get a steal of a deal this could be the perfect time for you!

booneybear

If you have alot of equity in your current home you can always use that for the down payment on an investment property.  Whether you re-finance or get a home equity loan.  And like PP said, the interest rate is usually higher on an investment property.