5 Options To Finance A Real Estate Investment

In this article, we have highlighted some financial options that may help your quest to invest in real estate. According to...

5 Options To Finance A Real Estate Investment

Investment in real estate demands a credible financial muscle pull. This shouldn’t in any way scare away potential investors who would want to invest in property in the near future and have no financial wealth at hand.

As with any other business, with property investment you “start small” and you’re guaranteed maximum returns in the future. These financial options offer an array of ideas on how to invest in real estate without necessarily wallowing in debt or “breaking the bank” so as to have a stable real estate venture.

The property will always find use either by being rented or entirely purchased “in full” to exchange ownership and custodian of the said property. These options include: 

1. Savings:

In savings, you have a certain amount of money set aside for investment in real estate in the future. Investing in property demands a high degree of financial discipline when saving. Ideally, you will save for a period of time to achieve the required target. 

2. Joint ventures:

Joint ventures involve two or more business partners pooling their resources and expertise to reach a certain goal. These individuals share common real estate goals, dreams, and aspirations. Additionally, the risks and rewards of the property investment are also shared. Family and friends too have “joint venture” in mind when investing in property. 

3. Bank Loan: 

Loans are used as startup capital during the investment period of the real estate property. With a real estate commercial loan, you can buy a restaurant along with the building. The property investment is used as a security for the loan. Furthermore, commercial real estate loans are used to purchase or refurbish a commercial property. These loans have a specified interest attached to them. 

4. Seller Financing: 

This is also referred to as “bond-for-title” or “owner financing”. This occurs when there is a mutual agreement between the seller of the property and the buyer, that the buyer acquires the property while financing his purchase over a period of time before assuming the property’s full ownership. For instance, a deposit or down payment usually 30% cost of the entire property is paid. In addition, the buyer assumes “ownership of the property in installments.” 

5. Sacco: 

Housing Sacco has made it easier for individuals to own their dream homes or even have a comfortable roof over their heads. Additionally, housing Sacco has offered the community of prospective home owner’s easy access to loans. To have this loan, your community acts as your loan guarantor.

The loans accessed from Sacco reach three times your savings. Apart from offering loans, Sacco offers affordable housing solutions. Indeed when the community of homeowners pools resources, they benefit from economies of scale. Examples of economies of scale include increased purchasing power and network economies.  

We can conclude that the big question is not if you will invest in real estate but from the above-mentioned financial options and many more, which one will suit your property investment needs. 

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