Financing Your First Investment Property
- What You Need To Know

Financing your first investment property is a different game than buying your primary residence. Here's what you need to know before you apply for a loan.

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Loan Types

Conventional loans often work for investment properties, but expect stricter requirements. You may also consider DSCR loans (based on rental income), portfolio loans from small banks, or even hard money loans for short-term flips. Each loan has trade-offs in terms, speed, and cost.

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Down Payment

Investment properties typically require 15–25% down, depending on the loan type. The more you can put down, the better your rate and approval odds. Having more skin in the game also means lower monthly payments and better cash flow.

 

Credit & Debt-to-Income Ratio

Lenders will look closely at your credit score (typically 700+ for best rates) and your DTI ratio. Keep your financials clean and ready. A strong financial profile opens doors to better terms.

 

Reserves & Documentation

Be prepared to show proof of income, tax returns, and reserves (typically 6 months of expenses per property). Lenders want to know you’re prepared for vacancies and emergencies. Have your documents organized before applying.

 

Tip: Shop lenders who understand real estate investing. A knowledgeable mortgage broker can match you with the right loan product for your goals. Ask about lender overlays, property types allowed, and approval timelines.

Financing can be the launchpad to your first rental—or your biggest obstacle.

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With the right preparation, you’ll be ready to leverage your funds into a solid, long-term asset!