How To Grow Your Real Estate Portfolio

 When financing a rental property interest rate should not be your only deciding factor. This might sound crazy to you but it’s true, there are many other key factors you need to be consciously aware of. Whether you are looking to purchase a small rental empire, or you want to turn your current home into a rental and purchase another property, strategically choosing your lender is crucial to your real estate investing success.

 The lender that you pick can have a major impact on getting you approved now and in the future. By choosing a suitable lender right from the start, you will have a much better chance of getting your properties approved and alleviate many of the problems other real estate investors face.

Here are just a few things to consider before you choose your next lender.  Every lender has their own internal guidelines, guidelines such as how many properties they will let you own. Some lenders will only let you have a certain number of doors in total, where other lenders don’t put a limit on how many doors you may own, but they have stricter qualifying requirements. For example one bank may let your total debt service ratio be at 40% and others will let you have 42%. That two percent can sometimes make or break the next deal. Understanding this strategy is imperative to your success as a real estate investor.

Now let’s look at getting the best interest rate. Don’t get me wrong, interest rates are very important, but typically the lenders who have the best rates usually have the strictest guidelines. In fact, not only may they have the strictest guidelines, they also usually have the least favorable terms when it comes time to sell or renew your mortgage, or you may be looking at unexpected penalties you didn’t realize when you originally got the mortgage.

Of course there are many other factors to consider (which are beyond the scope of this article), making it more important than ever to choose the right Mortgage Professional who understands the whole picture.

So the moral of the story is, look beyond the low interest rates, and make sure you’re not selling yourself short for your next rental property just based on rate. It is also in your best interest to in list a competent mortgage professional who has experience with real estate investors. If you are interested in learning more about this strategy, or for any other mortgage related questions, please contact me and I would be happy to help you grow your Real Estate Portfolio.

Renate Milburn, Mortgage Professional
The Mortgage Centre Comox Valley
milburn.r@mortgagecentre.com