With your decision to acquire an income property, you have also likely considered what you want to accomplish, and over what period of time. The same criteria that are used in any sound investment strategy or financial plan also applies to income properties. Property managers typically charge a percentage of gross income. This usually varies from 5% to 10% of gross income, often with an additional charge for new leases.
Property financing comes in many types and terms, depending on the property itself. Loans on income properties are usually tailored to each property type. Often, apartments can have longer loan terms than office or retail spaces. Remember that apartments are a more stable type of investment property than commercial buildings.
Before you enter the market for a loan, you should be sure to do some necessary groundwork. Here is a list of questions to investigate and answer that will help narrow down your request.
1.How much do you need?
2.What are you going to use the proceeds for and for how long?
3.How are you going to repay the loan, and under what terms?
4.What assets can you pledge to secure your loan, which would make your loan officer sleep soundly at night, if he decides to approve your loan?
Remember, loans are the products that banks sell. Look for the best combination of price, quality and reputation of supplier.
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