As well, for longer term holds, the timing could not be any better as rental rates are on the rise as well, demand is robust and there is some rarity in good quality homes.
So how about getting financing? In today's mortgage marketplace, home loans for second homes or in other words, vacations homes and home loans for investment properties are available and viable. Of course, the standards are a little different than for the purchase of a primary residence (a home you will live in), but there are still many affordable options given the current level of interest rates and house prices.
So lets get started.
First, you will need a down payment for the purchase of a second home or investment property and it will be need to be more than 0% or 3.5% as you cannot use a FHA home loan or VA loan to purchase one of these properties.
Second, second homes or vacation homes are homes that a homeowner does not live in year around, but does also not rent out (more on that in a minute). These homes generally have to be in a different metropolitan area then where the homeowner lives primarily. For instance, if you own a primary residence in Phoenix, you may call a home in Tucson or Sedona a second home, but you may not call a home in Scottsdale a second home.
On the other hand, when looking at an investment property (aka an 'income' property, a house that you rent out), generally a 20% down payment will be required. In fact, with a 25% down payment, interest rates will be even better. However, you will still see a slight bump for interest rates on investment homes, as opposed to primary residences and secondary homes. Investment homes will be any home that a homeowner does not live and owns for investment purposes, whether rented out or not. Also, any home in the same metropolitan area will also be considered a rental property.
So, if this what you were considering in your next real estate goals, lets talk so I can get you started.