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Home Improvement
Loans
for
Rental
Properties |
Some
consumers who own their own
home suddenly find themselves faced
with a
difficult dilemma. They own their own home
but see another property that needs repairs
but would make a great investment as
a rental property.
You have to secure
funding to buy the property and decide how to foot the
bill for the necessary improvements as well. One
thing you can do is take out a mortgage and pay cash for
the down payment and repairs but still get a home
improvement loan to cover any vacancies during the first
year just in case.
You may think it’s
better to use your money for the mortgage when and if
the property is vacant, but it could be better to use
the home improvement loan. Hopefully, your rental
income will be enough to cover both the mortgage and
home improvement loans.
Keep the cash as a
reserve on hand. If the house does become or stay vacant
for any length of time, use the cash to make payments on
the loan. As a rule of thumb, it’s always best to
use other people’s money when paying for an
investment.
There are other
options if you are the non-occupant owner of a rental
property that needs repairs. Many cities have
rental rehabilitation programs where you can secure
lending to get the property up to code.
You may need to
meet additional requirements – such as making sure the
property passes inspection every five years. You
can even apply for a forgivable loan where you foot the
bill for half of the repairs and the lender covers the
other half.
These are
generally reserved for owners of homes in certain
neighborhoods and are designed to help the city repair
run-down areas so that families can begin inhabiting the
area once again.
Information contained herein is deemed accurate and correct, but
no warranty is implied or given. Please consult
a financial advisor for specific advice pertaining to
your particular situation. © 2004 Apex Personal
Loans Store. All Rights Reserved.
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