What are My Financing Options When Buying Rental Property in Phoenix, AZ?

Real estate has been a favorite among Americans when looking to invest. Based on an annual Gallup poll, more Americans named real estate the best long-term investment versus stocks and gold. As more and more people are moving to Phoenix to settle, it would be a great location for a real estate investor to make a profit. 

While many would love to invest in real estate, the high cost makes it harder for newbies to enter the REI arena. The good news is Castle Rock Mortgage in Phoenix, AZ can help you find the best ways to finance your rental property.

Let’s take a look at your options, including traditional lending and utilizing assets you already own.

Investment Property Loans

If you are considering adding real estate investing to your portfolio, an investment property loan in Phoenix, AZ, can help you finance your plans.

Investment property loans are used for properties that can potentially produce income for you by leasing them out or reselling them after you fix them up and increase their value.

Types of investment property loans include construction, purchase, and rehab loans that can be used to fund various kinds of properties from single-family homes, apartment buildings, or even office towers.

A conventional mortgage is a good idea when buying a property with one to four units since this can provide the lowest rates and fees. The difference between a conventional loan on a primary residence and an investment property is that you’ll likely need a larger down payment, usually 15% for single-family units and 30% for multiple-family units depending on loan type.

Investors that are into renovating, reselling, or leasing, on the other hand, may turn to other loan options.

Private and hard money loans are another option favored for purchasing apartment complexes, medical office buildings, or office towers. The terms and rates offered are generally more flexible than conventional loans.

SBA Loan for Rental Property

An SBA 504 loan is another option to finance an investment property in Phoenix. The proceeds can be used to buy a building, fund a ground-up construction, or rehab an existing building. This option also gives a lower interest rate and a 25-year payment term.

You can borrow up to $2 million for commercial properties. An owner must occupy 51% of an existing building or 60% of a new construction project to qualify.

Financing Using Home Equity

If you have built up enough equity in your primary residence or another property, you can use this to fund your investment property. A home equity loan, HELOC (home equity lines of credit), and cash-out refinance loan can give you the money you need.

Leveraging your assets is a good way to finance your rental property, especially when other options don’t pan out. 

Is it harder to get a loan for a rental property?

Closing the mortgage for an investment property can be more challenging since lenders take on greater risks. To qualify, you need an acceptable credit score, cash reserves, and a down payment that meets loan requirements. 

For the best deals in Phoenix, AZ, inquire about an investment loan from Castle Rock Mortgage.

Need Help In Financing Your Rental Property in Phoenix, AZ?

Investing in real estate can be rewarding and lucrative for most investors, making it no surprise why rental properties are in demand in Phoenix. The population has grown by over 20% in the past decade, which points to investors making the most bang for their buck.

Choosing the best financing option for your rental property in Phoenix can be confusing, especially if this is your first time.

If you need help in navigating the whole process, why not leave all the heavy lifting to the professionals?

Castle Rock Mortgage is your trusted and experienced mortgage lender in Maricopa County, AZ, specializing in investment property loans.

Give us a call or send us a message on our website today!


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.