Renting is popular in Texas, with approximately 4.2 million people living in rental properties. That's one reason so many people buy investment properties in Texas.
Do you want an excellent way to earn long-term income? Real estate investing might be the solution. However, you must find real estate financing to get into this investment unless you have enough cash.
Many people start investing in properties by acquiring financing, but what are the options? Continue reading as we delve into some of the best ones for purchasing Dallas real estate.
Conventional Mortgages
Regardless of the financing you find, you must do two vital things when investing in real estate:
- Choose the right properties
- Find and keep great tenants
Before you can do these things, you must find real estate financing. Fortunately, there are many options.
The first is a conventional mortgage. This type of loan is a common type of home loan used to purchase your primary residence. You may need 20% down for the purchase or pay private mortgage insurance.
The downsides to conventional loans are the down payment requirement and strict eligibility criteria. However, they're a great choice if you qualify.
FHA, VA, and USDA Loans
Conventional real estate loans do not have a governmental agency insuring them, but several other loan types do. These include:
- FHA loan: Backed by the Federal Housing Administration
- VA loans: Backed by the Department of Veteran's Affairs
- USDA loan: Backed by the U.S. Department of Agriculture
The difference is that the governmental agency that backs the loans pay the lenders if the borrowers default. As a result, lenders have less risk when issuing these loans.
The good news for borrowers is that the criteria are less stringent for these loans compared to conventional loans. Unfortunately, you might be able to buy a home with these loans, but you might not be able to buy investment homes.
Alternative Real Estate Financing Options
Many people also turn to alternative options for purchasing real estate property. For example, some people refinance their home loans to acquire enough cash to buy their first investment property.
Other people cash in their investments to use cash for investment properties. You can also turn to jumbo loans or other loan types lenders offer.
Another excellent choice is to talk to a property management company. You'll likely want to hire one to help you manage your rental properties, but they can also help you determine creative strategies for investing in real estate.
Run Your Business the Right Way: Hire a Property Manager
Real estate financing comes in many shapes and forms, and you must find the right option for your situation. Look into these loan types or seek other types yourself.
When you find the right financing and make the purchase, hire a company to help. Property managers run rental property businesses, offering experience and quality services.
PMI Premier offers these services and more in the Dallas, TX area. We are dedicated to providing excellent services for all types of real estate properties.
We've served real estate owners for over 20 years and would love to help you! Get in touch with us to learn more.
