Renovations to Your Investment Property
With the COVID-19 virus heading into its second year, many homeowners have taken the initiative to make renovations to their residences in order to accommodate for working and learning from home, as well as for simply spending more time there in general.
There are a number of ways to pay for these renovations, such as taking money from personal savings, borrowing against the property using a home equity loan, and/or taking advantage of various government lending programs.
But what about investment property? Are there similar ways to pay for updates on rental real estate?
The goods news is that there is!
One option that many real estate investors use is a construction loan. This short-term funding can be used to pay for the cost of upgrading an existing property (as well as the cost of building a new house). Unlike some loans, the proceeds of a construction loan are not all provided to the borrower at one time. Rather, the funds come out in “segments,” and are paid directly to the contractor(s).
An alternative is to obtain a hard money loan. These are also short-term loans, and they are secured by the value of the property. Hard money loans can be somewhat easier to qualify for than traditional borrowing through a bank. They may also be more flexible, as you could be able to negotiate directly with the lender on the terms.
Offering conveniences like home office space and plenty of room for kids to attend “virtual” classes can make your investment property stand out, and in turn, could net some good long-term tenants.
But even so, if you are managing the property(ies) on your own, you may not have time available to enjoy other things in life. You could if you brought an experienced local property manager on board, though. If you own residential real estate in Central Florida, we can help. So, give us a call for more information on our property management services.