The Rueth Team - Denver's Top Mortgage Company
Another advantage to gaining financial wealth through real estate market investing involves the use of a rental property or even multiple properties other than a primary residence. Instead of funneling money into a lived-in household, an alternative investment property can add multiple benefits for an owner while serving as one of the most important necessities for individuals who wish to stake a claim into their overall well-being and increase their own financial portfolio. While the use of money for a primary residence is obviously important and something that must be accounted for initially, the application of additional funds towards another piece of property provides substantial opportunities. Building multi-generational wealth begins here… with the 1st simple investment, generating its own income, tax benefits, and appreciation.
Each of the following characteristics highlights a loan category which can serve to benefit both the startup investor and veteran investment property landlord who has many years of experience in dealing with potential renters and the rental real estate market.
A conventional loan type offers the most flexible use of monies for an investment property supporting the investor’s commitment to their overall financial well-being. By securing a conventional loan type, the necessity for a federal backing is typically not required and can instead be added to a straight profit agenda associated with an individual’s specific engagement.
Conventional funding has a variety of options to choose from and depending on the budget available for a buyer, could serve to assist in allowing an individual to add a potential investment property to their portfolio despite hesitations which may occur due to a current financial situation. With the use of rental income to offset the mortgage payment and as little as 5% down on a multiplex, this loan can be as flexible as we are creative.
The Federal Housing Authority (FHA) offers similar loan types to individual’s hoping to purchase a home in addition to those wishing for an investment property. These FHA loan types are typically reserved for individuals who plan to inhabit the property to which the loan is applied, in order to complete execution and close on a deal.
The biggest opportunity for an FHA loan to be a rental property involves the purchase of a multi-family unit. If the borrower lives in one unit of the building and then rents the remainder, an FHA loan may be applied and could serve in the best interest of a potential investor.
Depending on the exact scenario or intention of the loans which are applied, an adjustment can be made to the bottom line but wealth management remains key regardless of the specific application.
Unknown to most Veterans, they have the ability to purchase a multi-unit residential property using their VA eligibility. Active military personnel, veterans or qualifying family members can build wealth at an accelerated rate by considering using this property as both a primary home and an investment. Similar to FHA loans, the VA loans associated with purchasing a residential property have a few restrictions.
With our deep understanding of the VA loan program, our team can support our clients in buying multiple-unit properties despite these restrictions. This loan program is also the most flexible on credit score and debt to income ratio; giving our military an incredible advantage to wealth building!