A lot of investment properties in Boston are being purchased with cash. A recent report stated that cash purchases have increased in the last 5 years. Unless you have a lot of liquid capital, you may want to try to finance your investment property. Getting a mortgage for your place through a bank can be tricky. Many banks want more than a traditional 20% down payment for an owner occupied home. You can see requirements of 25-30% for investment properties. Banks will also charge higher interest rates for investment properties. The banks try to justify the higher interest rates by arguing it is more risky to lend to investors. They reason that if a property is owner occupied it is less likely to default because the lender is living there and has increased incentive to keep the payments going.
Hubstar realty works with many owners and may be able to help you craft a third way to own your property. Sometimes called owner financing, essentially the buyer would pay the owner a down payment and then the buyer makes payments until the debt is fully paid. If you decide to live in the apartment then you can think about what would’ve been your rent to go towards paying off the loan. If you don’t decide to live in the apartment you can collect the rents and use it towards loan repayment.
As of right now Hubstar has a property in Allston that you could use owner financing on:
- Allston Condo right on Commonwealth Avenue, 3rd Floor
- 2 bedroom, 1 bathroom
- 975 Square Feet
- Hardwood floors, granite counter tops
- $460 condo fee, $260 taxes
This property is currently being rented out for $2,400 a month. The renters are willing to stay and property has strong rental history. The owner is asking for 30% down payment and would be giving the buyer 3 years to make payments for the remainder. If you are interested in buying the place straight out that is also preferable.