investment-300x199There is a constant struggle between saving and investing as you should think of ways that will help you in a crunch as well as ways to increase your current income levels. Investing in property will do both for you. It will hold up as an appreciating asset while also giving you monthly income in the form of rent. In a recent market survey made by Bankrate, nearly 76%, everyday consumers are wary of the stock market; it is just too risky and too complicated.

It is also at this time that the real estate market is also really starting to pick up and prices have dropped. In addition, the new lending rules that came into effect earlier this year has made the lending and along with it the buying of investment property much easier and safer.

Here are some things you should know that will help you make your decision on purchasing or going for a loan to purchase an investment property.

  • The new rules on lending on investment property or rental property was drawn up as a direct result of the Dodd Frank Act of 2010. The act was formed specifically so that another 2007 like incident should never happen again. The act was designed in such a way that lenders not abuse the borrowers and the borrowers are able to make timely payments.
  • The Federal Housing Administration loans, which normally have small down payments has reduced further. It differs from state to state and some places like Florida have seen a drastic drop, in some cases from $417000 to $285000.
  • The rates for a rental property, however a little higher than the rates given out for primary residences. Sometimes as much as five percent more on the down payment.

The rates are low and the value is sure to surge in the coming years, but more importantly, an investment property is something that can give you a steady source of income through the years, for as long as you wish to hold it.

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