House made of money image via ShutterstockBy Leonard Baron
These days, many people hear in the news that it's a good time to buy rental property, and so they've decided that they would like to get started in the property rental business, (a.k.a. being a landlord).
But, in order to get into the rental property investment business, how do you obtain mortgage financing to purchase your first rental property? It's true that it has become a lot harder to get financing these days, but for people with decent credit and sufficient income there is still plenty of money available to borrow. For terminology purposes, when you borrow for a rental property, it is called non-owner occupant (NOO) financing. Let's run through some financing issues, items and suggestions that may help you.
Buy as an owner-occupant
The best way to get into the landlord business is to buy a home that makes sense as a rental property, but you buy it as a personal residence, and live there for the required 12 months that an OO loan requires a borrower to do. As an owner-occupant, you get the best financing terms and you may be able to put down as little as 3.5 percent with FHA financing. The loan stays in place with the original terms when you move out and make it a rental. It's the best way to go!
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