Down Payment Size for Long Term Rentals
Hi, I'm looking for advice on purchasing a long term rental. Real estate continues to be high where I am located and when I calculate the mortgage payment with 20% - 25% down, it only breaks even with the rent I could collect. My question is, would a down payment at 40% or more be realistic for this type of acquisition? I assumed I could cashflow for 20% or more, so I want to see if I need to adjust my expectations based on the experience of others. Thanks.
I could not find this specific question looking through the first half dozen pages of results when I searched in this forum for this question.
Most Popular Reply
some ideas:
- - yes you could put more money down upfront, even though it's not ideal.
- - Look for off-market deals that are much cheaper, using hard money and then refinancing with a rental loan.
- - Find properties where the owner will finance most of it, so you only need a smaller loan with the higher interest for the down payment.
- - Take over a property where you can continue the seller’s lower interest payments.
- Another thought to give why would you want to do a rental at all, I mean those terms are horrible. why not buy something else with a better return on invest? A note, tax lien, CD... or we could partner on a note and get 5-8%
Feel free to reach out to discuss these ideas!