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For investors

Investing in rental property

Whether it's your first rental, keeping your current home when you move, or growing a portfolio, start with the numbers: cash flow, returns and the right loan. Then talk to us about financing and finding the property.

Rental cash flow and returnsCash flow, cap rate, cash-on-cash and DSCR for any rental.Open →DSCR investor loansQualify on the rent, not your personal income.Open →Keep your home as a rentalHow keeping it affects what you can borrow next.Open →Fixer-upper budgetRepairs, contingency, loan and cash needed.Open →Self-employed incomeHow lenders average business income.Open →Bank statement loansFor self-employed borrowers.Open →Business and commercial loansSBA, equipment, commercial property and more.Open →Assumable mortgagesTake over a seller's low-rate loan where allowed.Open →

Questions to answer before you buy

  1. Does it cash flow? Rent minus the payment, taxes, insurance, HOA, repairs, management and empty months.
  2. Which loan fits? Conventional investment, DSCR, or living in one unit of a 2 to 4 unit home.
  3. How much cash do I need? Down payment, closing costs and reserves; lenders often want several months of payments in reserve.
  4. What are the Florida extras? Insurance, flood zones, HOA rental rules and CDD fees can change the numbers a lot.

Common questions

What is a DSCR loan?

An investor loan that qualifies mainly on the property's rent compared with its payment (the debt service coverage ratio), rather than your personal income. Useful for self-employed investors and those with several properties.

How much do I need to put down on a rental?

Usually 15% to 25% for an investment property, depending on the loan and your credit. Living in one unit of a 2 to 4 unit home can allow a much smaller down payment.

Can I turn my current home into a rental?

Often, yes. See how the rent compares with your costs, and how keeping it affects what you can borrow for your next home. Remember the homestead exemption ends when it's no longer your main home.

Investing: step 1 of 5

Your next step: Cash flow

Does it pay its way?.

Cash flow → Or ask Bill

Talk to us about your next investment

Financing and finding the property, from one local expert. Free, no obligation.

Bill McElhill

Bill McElhill

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Educational information only. This page gives general information to help you learn and plan. It is not legal, tax, financial or other professional advice, or an offer to lend. For advice on your situation, talk to a licensed professional. Terms of use

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