With a strong rental market and historically low mortgage rates, the opportunities for purchasing rental properties in the current market are unprecedented. You can purchase an investment property for one of two reasons. The first is to repair and then resell the property. The second is to rent out the property for the income stream – Yeah, rental properties really cash-flow right now.
In either case, you need to make sure your numbers work on paper before doing it for real. This means getting input from outside experts such as your real estate agents, contractors, and me: your mortgage lender. We can provide you with the information you need to make a good business decision.
A couple things I can share with you now: Plan on putting a minimum of 25% down on any rental investment property. The low down payment programs are for Owner Occupied rental properties. Any late mortgage payments in the prior 12 months, or bankruptcies in the previous seven years, will make it very difficult to secure financing.
You can plan on paying a higher mortgage interest rate in NH for financing on investment property. As far as assets go, we’ll also be looking for six months of mortgage payments, including taxes and property insurance, in reserve. . This may be in the form of a checking or savings account, or a percentage of some type of retirement account such as a 401(k). If you want to run the numbers or do a cash flow analysis on a rental property before making an offer, feel to give me a call at 472-2272.