Utah Investment Property Loans

Why Invest in Utah Real Estate

Utah remains one of the fastest-growing populations in the United States, due to its booming economy and renowned natural beauty, which creates a steadily high demand for housing and rentals. Local and out-of-state investors alike can benefit from relatively low property taxes, high property appreciation potential, and a strong rental market among young professionals, students, and tech workers.

Rental properties in Utah are showing strong potential in many growing cities including Salt Lake City, Provo, Lehi, Ogden, and St. George. These cities included, Utah’s population has grown by over 18% in the last ten years – making it one of the fastest growing states in the U.S. The young (median age of 31 years old), educated demographic of new residents is what fosters stability in rentals and starter homes.

Because of the growing population, returns on Utah rental properties are expected to be strong for the foreseeable future. Higher-than-average appreciation rates and a large market for vacation rentals in the winter ski resort towns all translate to solid investment opportunities.

Types of Investment Property Loans Available in Utah

Several financing options are available when buying a rental property in Utah, all catering to specific investors’ needs and property types. Here are some of the most common:

Conventional Loans

When most people think of buying a home, conventional loans are what they think of first. Borrowers will need to provide a higher down payment, and the credit & income requirements are generally more strict, but these loans provide very competitive rates for well-qualified buyers. If you have a high credit score, steady income, and a low debt-to-income ratio, this loan may be a great fit.

DSCR Loans

A favorite of real estate investors, DSCR loans (Debt-Service Coverage Ratio) allow you to qualify for the loan using the potential rental income of the property being purchased. Instead of qualifying with traditional proof of income (like pay stubs and tax returns), you are leaning on the property’s ability to provide steady rental income.

Bank Statement Loans

For those who don’t have traditional W-2 income sources, like small business owners, freelancers, and retirees, qualifying for a conventional loan may prove difficult. With bank statement loans, investors can use their deep cash reserves to verify income.

VA Loans

Although VA loans are primarily designed with primary residence purchases in mind, they can be utilized to purchase multi-unit properties. This means that, as long as the borrower is maintaining a primary residence in one of the units, the remaining residences can be used to generate rental income. VA loans are a fantastic option for eligible veterans and active-duty servicemembers because they offer low/no down payment and very competitive rates.

FHA Loans

Another government-backed financing option, FHA loans are a great investment gateway for first-time buyers or those who are looking for lower down payment requirements. Like VA loans, these were created with primary residences in mind; however they can also be used to purchase multi-unit homes. Again, this allows investors to live on-site while generating rental income from the other units.

Home equity Loans

For investors who already own a home, home equity loans (HELOANs) will leverage your home’s existing equity to help qualify for the purchase of a new property. The funds are disbursed as a lump sum, making it easy to finance anything from a down payment to the entire home.

Asset-Based Loans

Asset-based loans provide the opportunity for investors to use their liquid assets – like real estate, vehicles, etc. – as secured collateral for a loan. These are a fantastic option for borrowers with a strong inventory of assets but challenged credit or non-standard income sources.

Private Money Loans

Private money loans are provided by hard money lenders in Utah, and are a popular option for fix-and-flip investors that need their funds quickly. These loans are short term and, similar to non-QM loans, offer a quick turnaround and more flexibility for those who may struggle to qualify for a conventional mortgage loan.

How to Buy an Investment Property in Utah

Before securing an investment property loan in Utah, borrowers will want to familiarize themselves with the local real estate market, their own income & credit ratings, and their overall financing needs and goals. Here are the basic steps:

• Evaluate your financial position: You’ll want to take a look at your strengths and weaknesses as a borrower. Monitor your credit score, verifiable income, and any potential assets to leverage. You can even utilize the Griffin Gold app to learn more about improving your credit score and building an action plan for investing.
• Study the local market: When looking for a Utah investment property, it’s important to research population growth & demographics, emerging markets (e.g. the growing tech scene in Lehi), and historic/forecasted rental demand in population centers.
• Choose a loan type that fits your needs: Whether you are a seasoned investor with plenty of assets and equity, or a first-time buyer with not-so-great credit, there is likely a program that will suit your financing needs.
• Get pre-approved: Gather necessary documents and apply now to see what you can qualify for. Once you’re pre-approved, you can refine your strategy and begin working with local real estate agents to zero in on your property of choice and make an offer.
• Get funded: Once the buyer accepts your offer, funds are released and you are one step closer to building your dream real estate investment portfolio!

Why Choose Griffin Funding

There is no question that you have your pick when choosing a lender for your Utah rental properties. However, while many lenders may offer a wide selection of funding options, very few actually specialize in them. The team at Griffin Funding prides itself on being knowledgeable in the many options available to you as a real estate investor. Whether you are a first-time buyer or a seasoned pro looking to refinance an investment property, you will be in good hands with Griffin Funding as a partner.

Those who have experienced difficulty in qualifying for a loan and are considering resorting to a Utah hard money lender may be surprised to see that their other financial strengths can get them approved for more competitive terms.

Secure the Best Investment Property Loan Rates in Utah

Utah is one of the top real estate investment states due to its booming tech industry, natural beauty, growing population, and in-demand rental market. For the educated investor, Utah real estate can bring quick monthly cash flow and long-term appreciation that will encourage the growth of a healthy real estate investment portfolio. Apply now to take that first step and see what Griffin Funding can do for you.