What is a rental property loan?
A rental property loan is a mortgage secured by real estate held as an investment. It is a type of investment property loan used by real estate investors to increase liquidity and manage cash flow. Rental property mortgages are typically used to finance 1–4 unit SFR, townhouses, and condos. These properties are typically rented by tenants and real estate investors use the rents generated from the properties as a source of income. For serious investors looking to grow their investment property portfolio, a rental property loan is an easy way to cash-out refinance properties that have an abundance of equity and use the proceeds to continue to acquire more properties. Utilizing investment property loans and bridge loans is a foundational aspect of real estate investing, the BRRR method in particular. Investment property loans are increasingly being used to stabilize short-term rentals in addition to properties with long-term tenants.
What type of loan is best for an investment property?
Getting a loan for your investment property from a traditional lender comes with stricter requirements than a conventional mortgage. If you only plan to have one or two rental properties and have excellent credit, a mortgage from a bank may suit your needs. However, for those who are self-employed or are aggressively growing their investment property or short-term rental portfolio, utilizing a reliable alternative lender may be your best choice. A rental loan can be used after a fix and flip loan or construction loan for a long-term financing solution without the hurdles of traditional bank underwriting.
Getting started with a rental property loan
Webster Capital is a leading provider of investment property loans and rental property loans for your portfolio, including short-term rentals. We underwrite the loans based on the value of the underlying asset and its associated cash flows, not credit or personal income, making the process quick and straightforward.
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No personal income requirements or debt to income calculations. We base our valuations on the income the property produces and see how it stacks up against comparable properties.
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Low documentation requirements. All of our loan products require virtually no paperwork other than that provided by your attorney.
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Scalable. Using other people's money is the key to growing your investment property portfolio. We are happy to write investment property loans on as many properties as you can buy! Using a cash-out refinance strategy can be a driving factor to your success.
If you are interested in finding out more about rental property loans, contact us today or apply online.