Common Concerns About Purchasing Investment Real Estate

18 November 2015
 Categories: Real Estate, Blog

Investing in real estate can be an excellent way to utilize excess money that you have available. However, investment real estate is a topic that you may not have much experience with, and this can lead to you have a number of questions that you need answered. In particular, the following two questions are fairly common, and once you have the answers, you will find yourself in a far better position to make a choice about pursuing investment properties.

Can The Income From The Investment Property Be Considered For A Loan?

One of the benefits of owning an investment property is that you can rent out the space to generate income. However, there are many people that may not meet the income requirements for taking out financing for this purchase. In these instances, you should be relieved to learn that you can count some or all of the projected income from the property as income for the loan application.

The exact rules with how the projected income will be used for the loan can vary from one lender to another. Therefore, you may need to speak to multiple lenders to determine which one has the most beneficial way of considering this type of income for your application.

Is It Possible To Purchase Investment Real Estate Through A Company?

There are many people that will join with one or more partners when purchasing investment real estate. This can be an excellent way of pooling resources to purchase more valuable properties. However, many people may be uncertain as to whether this can be done through the formation of a holding company.

Luckily, this is usually possible, but there are some communities that may have zoning laws preventing companies from purchasing property in residential communities. Therefore, you will need to carefully review local laws before you can decide whether this is a viable option for you and your business partners. Otherwise, you may need to consult with a contract attorney to ensure that a legally binding agreement can be formed between the private investments.

Investing in real estate can be an excellent option for those that are wanting to invest in something other than stocks, bonds and other financial instruments. Knowing that the future income of the property may be considered when getting a loan, as well as the fact that you can often form a company to purchase investment property, should allow you to be far more informed about pursuing this type of purchase.

Speak to an investment professional for more info.