Are you thinking about buying an investment property in 2024? You hear interest rates may be coming down, and property values have leveled. You may be concerned that if rates go lower, more buyers would enter the market thereby driving prices up and making it harder to purchase a property. So, now may be a good time to buy.

How much down payment is needed to purchase an investment property?

Conforming loans require a minimum of 15% down payment. But, the discount fees to get a loan at this down payment level are pretty high. It may make more sense to put a little more down instead of paying the discount fees to the lender. At 20% down, the costs come down a little, there is no mortgage insurance, but there may still be a big discount fee. The best rates and fees available are when you put at least 25% down on an investment property. With this much down payment, you also have a better chance to cash flow, meaning your rental income will exceed your mortgage payment. The down payment must be from your own funds, and not gift funds.

If you are considering entering the investment real estate market in 2024, and want to look at your financing options, contact us and we can help!