Financing a long-term rental.. best approach?

For a long time I’ve been wanting to rent out a duplex or even a retirement 2-Bdrm/1-Bath via Section 8 renters.

If I plan to hold this property at least, say, 10 years, would I want an interest-only loan… conventional loan… fixed rate… or some other loan being as this is a rental property.

I’ve been renting out three other properties, but they were trailers on a small lot and had to go with non-prime banks since financing a 1974 trailer is not even considered by larger banks. I just sold one of them since I want to get out of non-appreciating property and into “stick-built” homes or duplex.

Any idea what’s the best loan for this? Thanks. :smiley:

You will definitely want to get into a 10 year Interest Only loan on a fixed rate if you want the lowest, most steady payment available. On this program as rent increases your monthly payment stays put which allows you to cashflow more as the years progress.

Keep in mind that you will have a hard time finding 100% financing for a purchase of an investment property duplex. You can count on 95%, but if you are planning on keeping this property for 10 years you may want to plan on paying 20% down upfront to lock into the lowest rate possible (remember the trend rates are taking the last 2 years is UP).