Potentially Lower Risk:
Because of how it uses, an investment property loan often has a lower risk associated with it than a primary home loan. A bank will usually consider your investment property a secondary investment. You have a primary residence you own and can use to secure a mortgage if you cannot pay back an investment property loan. This lowers the risk for both sides of a potential deal: If your borrower cannot pay back his or her loan, they still have somewhere to live (their primary home), and if their borrower defaults on their mortgage, the bank does not get saddled with abandoned property. It is because of these perks that more investors are considering an investment property loan.
Good Return-On-Investment (ROI):
Property Ownership As Soon As The Loan Pay Off:
For example, if you bought a home with an investment property loan of $300,000 and sold it five years later for $315,000—that is a 5% growth rate! Not bad compared to savings accounts that are often less than 1%.