Complete Guide to Financing for an Investment Property

Complete Guide

to Financing for an Investment Property

Don’t Know Where To Start? Our Investment Loan Experts Are Here To Help!

Real estate is America’s favorite investment vehicle when it comes to building wealth over the long term. Putting your wealth in real estate makes sense when you’re trying to improve financial security and generate a steady income for retirement.

Before you jump into your next investment venture, American Loans and Mortgages in Utah highlights some areas you may want to consider as you determine if investing in real estate is right for your portfolio.

Image of an upper-middle-class home in suburban Utah.

Do Your Research

You may need to put up a larger down payment (20% for most lenders) for investment property loans. This means you would have more at stake if the property doesn’t generate the income you need it to. Before you start investing in real estate, do your due diligence by researching the local real estate market and consulting with a professional.

Young couple is happy after closing on a loan.

Investment Property vs. Conventional Loan

Commercial lenders typically provide financing for investment properties that will not qualify under conventional loans. Conventional mortgages are guaranteed by either Freddie Mac or Fannie Mae. Government-backed loans carry lower risks, so lenders are willing to offer lower interest rates for qualified borrowers.

Loan approval will depend on your credit score and the property’s income-generating potential. Commercial loans often carry higher interest rates and origination fees than a conventional mortgage, and lenders prefer experienced investors when determining approval.

Home with balcony and flat roof in Daybreak Utah.

Benefits & Risks

Good investment properties allow you to generate stable cash inflows through rental income, profit from the property’s business activities, or gain on sale of the investment property if it appreciates in price. Real estate also helps you diversify your portfolio and benefit from tax advantages.

While there are opportunities in real estate, there are risks involved. For one, your wealth is tied up in property that can’t be turned quickly into cash. The real estate market is also unpredictable, and you don’t want to be caught in a market downturn if you aren’t planning to hold the property for several years while the market stabilizes. You could also end up with negative cash flows when you have problem tenants, low occupancy, or unexpected repairs.

Real-estate agent giving keys to new property owners

Partner With American Loans

Finding a loan to buy an investment property does not need to be stressful. Investment property loans with American Loans allow you to finance up to 10 properties. We can finance up to 75% of the future value of the property. This way, you have enough money to renovate and refurbish your investment property.

Investment loans work differently from conventional loans, so make sure you do your research before making a decision. Like any other investment, consider the benefits and the potential risks to your portfolio.


If buying an investment property fits your goals and you’re ready to start looking for a lender, partner American Loans and Mortgages to access more loan options in Utah.

Discover Your Full Investment Property Loan Potential