March 9, 2020
Should You Start Investing in Rental Properties?
We are happy to announce Bay Mountain Capital now offers rental property loans. This expands potential investment opportunities to include single family rentals for both new and experienced investors.
Rental properties are a good way to invigorate your portfolio with a mix of real estate properties. Because of our new offering, our borrowers will enjoy the same attentive service available to fix-and-flip borrowers. This service will apply to a greater range of property investment vehicles.
Bay Mountain Capital offers two variations on our rental loan programs. Our first offering is a low credit score rental loan program. Additionally, we have a preferred rental loan program with more favorable interest rates for well-qualified borrowers.
Rental property investment loans are available with 36- and 60-month terms. Furthermore, minimums are $50,000 in a primary market and $75,000 in a secondary market.
Advantages of Investing in Rental Property
Unlike fix-and-flip projects, a rental property can begin providing you with a faster, reliable return through quick occupancies.
By charging rent that includes profit above maintenance costs and loan servicing amounts, you’re earning a return on your investment.
Rental investments are not effortless. However, with the right team, it can take less hands-on effort than investing in fix-and-flips with fewer surprises.
The timeline of investing in rental properties is slower than the timeline of a standard fix-and-flip. Rentals also offer a relatively reliable market, especially in established or up-and-coming neighborhoods. There’s a fairly steady population of people seeking to rent homes, too. Rental properties are attractive to those relocating and to those who don’t have the ability to obtain a mortgage.
A rental property investment benefits you in two ways:
- First, you’ll gain value as a result of any improvements you make to the property, and that value will also increase as the property appreciates over time. Much of that increase in value is up to you. If you want to make major upgrades that would be valued by the market, like an extra bathroom or bedroom, you can. If you want to save money by not hiring a property manager because you would prefer to be hands-on and do the work yourself, you can do that, too.
- And second, you build equity in the property as you pay down the mortgage (our rental loans are interest only, no principal paydown).
Your Rental Property Investment Strategy
In order to be successful in rental property investments, you need a plan, much like you would if you were investing in a residential fix and flip. Here are a few things to include in your plan:
- Develop your team of trusted advisors, like a real estate agent, general contractor, and if you’re hiring one, a property manager.
- Determine what makes a good rental investment for you: ideally, the money coming in from rent will cover all the necessities to keep the property well-maintained and the mortgage payment, plus some leftover.
- Talk to a lender like Bay Mountain Capital to discuss your financing options for rental properties.
- Do your homework and come to the table prepared to discuss down payment and collateral.
- Once you’ve chosen your rental property and secured the loan, it’s time for closing on the property, and if there are vacant units, get to work on filling them.
Rental properties are one way to strengthen your real estate portfolio. Although it can take hard work, it can be lucrative as you gain value through improvements, appreciation, and equity, especially for properties held long-term.
As an experienced real estate lender, Bay Mountain Capital has the insight to successfully expand its services to include single-family rental loans. Our knowledgeable team works hard to support our borrowers in pursuit of their investment goals.
Act now to contact BMC and learn why single-family rental loans should be part of your investment strategy.
About Bay Mountain Capital:
Bay Mountain Capital has been in business for more than a decade, closing approximately 2,000 loans. We specialize in financing all types of residential and commercial property investments throughout Texas and Georgia. Using common sense and value-added approach, we strive to incorporate these principles into our underwriting and closing processes.
As a direct lender, Bay Mountain Capital can close a loan within one day after receiving a complete file and clear title. The process generally takes two weeks for a residential loan but can be accelerated where circumstances require it.
We are primarily an asset-based lender, which means that qualification requirements are limited. Our rates and fees are among the lowest in the industry.