How to Secure Finance for Investment Properties
Taking the initial step to buy an investment property can be rather savvy and profitable if you have considered the costs and risks involved. An additional property can serve as an extra stream of income if the intention is to buy-to-rent, or as an investment that will increase in value over the years. The location and property type is also vital as it will determine the rental amount that can be requested. Securing finance for the investment property can be a long and daunting process if you do not go through the correct channels.
It is good to note that, unlike buying your first property, when investing in a second property you do not necessarily have to exhaust your savings in order to put up a deposit. Stable property owners are able to leverage the equity of the current property and put it towards the second property.
While there are many financial institutions, banks, and money lenders in the market, it is advisable to approach a reputable and trusted source. When you begin your loan approval process you should seek a company that will provide you access to a specialist from the asset-based loan division that focuses on the property industry. This will save you time and money. Your chosen financial source should deliver a highly responsive and personal service to your property finance requirements. If you feel they are not meeting your needs or deadlines it is best to shop around and not delay the process much longer.
How does the loan process work:
- Make contact with the chosen financial source. Email and online forms are the fastest way that will avoid you sitting in queues.
- Compile all relevant and important information regarding the planned purchase to present to the company.
- In some instances, the financial source may visit the property concerned to ensure that it is a good investment.
- After the financial source evaluates the property, then the loan arrangements can be finalized if there are no further obstacles.
Depending on the size and nature of the property, the time a loan takes to be approved may differ for each individual. Your history with the financial source also plays an important role with regards to the duration of the loan process.
When taking out a loan, financial institutions, banks and lenders require important documentation which will help secure your loan. These documents include:
- Proof of income.
- Latest 3 months personal bank statements.
- Personal assets and liabilities statement for loan amounts over R1 500 000.
- Copy of your ID document.
- Copy of the purchase agreement.
- Copy of your marriage certificate or ANC Contract (if applicable).
Once you have been granted the loan you can go ahead and make your purchase. It is important that you also take other hidden costs into consideration as this will affect your monthly expenses. These costs can include levies, rates, and taxes.
Investment Opportunity
If you are looking to invest in a residential property you do not want to miss out on this 1 Bedroom Studio Apartment For Sale in Umhlanga. Priced at R2,995,000, it is secure with beautiful views to marvel at. It is the ideal buy-to-rent property which can increase your rental income. Umhlanga is an upper-income area which boasts some of the largest as well as some of the most expensive properties in KwaZulu-Natal, giving you a secure long term investment.
Buying an investment property can be a challenging process. Enlist the services of the Kamdar Group for expert property advice and find the ideal investment property for your portfolio. Contact us now!
