Virginia Investment Property Loans

Benefits of Investing in Rental Properties in Virginia

With strong economies in the government, tech, and education sectors, Virginia offers a diverse population with a steady demand for housing statewide. Here are some of the most appealing benefits awaiting potential real estate investors:

• Opportunity: First-time investors and seasoned pros alike can benefit from the steady rental markets across Virginia’s urban, suburban, and rural areas. From the sprawling rental properties in Virginia Beach, VA, to small but vibrant communities, Virginia is an excellent place to build diverse investment portfolios.
• Steady rental income: With consistently high rental demand, monthly rental income can become a reliable revenue stream. The steadily rising property values mean long-term appreciation of your rental properties in Virginia.
• Tax advantages: The ability to deduct mortgage interest, property taxes, and maintenance costs from taxes will reduce your taxable income as a real estate investor in Virginia, while capital gains tax deferrals will help save money when you sell.

Types of Investment Property Loans Available in Virginia

Once you invest in Virginia real estate, you may discover a long list of potential financing options. Each loan caters to specific investor needs, so it’s crucial to know which will be the best fit for you:

Conventional Loans

People often think of conventional loans when they hear about investment property loans in Virginia. These loans offer very competitive rates for well-qualified borrowers but require a higher down payment and stricter credit and income requirements to qualify. This loan is ideal for those with a high credit score, steady income, and low debt.

DSCR Loans

Debt-Service Coverage Ratio (DSCR) loans are the go-to for many successful real estate investors due to the ability to qualify using the potential revenue of the investment property. Instead of relying on proof of the borrower’s income (pay stubs, taxes, etc.), DSCR lenders favor the property’s potential to earn steady monthly rental income.

Bank Statement Loans

For investors who struggle to qualify for traditional loans due to a lack of traditional W-2 income (small business owners, contract workers, retirees, etc.), bank statement loans allow borrowers to leverage their deep cash reserves to verify income and help qualify for the loan.

VA Loans

VA loans offer a government-backed financing option for our county’s active-duty servicemembers (and its eligible veterans) to purchase a primary residence. VA loans bring the benefit of zero down payment and very competitive rates.

The buyer must maintain a primary residence in the property; however, multi-unit properties are allowed, so an investor can live on-site while collecting rent from the additional units.

FHA Loans

This additional government-backed option provides low-down-payment financing for first-time buyers and those overcoming challenged credit. Like VA loans, the buyer must maintain a primary residence in the dwelling. However, they can also purchase multi-unit properties to generate rental income for unoccupied units.

Home equity Loans

For real estate investors who already own a home and are looking to expand their investment portfolio, home equity loans (HELOANs) allow borrowers to tap into their home equity to qualify for a new loan. These loans offer great flexibility and an easy lump-sum disbursement.

Asset-Based Loans

Similar at heart to bank statement loans, asset-based loans offer yet another alternative for those who struggle to qualify for conventional loans due to a lack of regular W-2 income. With asset-based loans, you leverage your liquid assets (real estate, vehicles, etc.) as collateral to secure financing.

Private Money Loans

Hard money lenders in Virginia often use private money to issue loans. These short-term, high-risk loans boast quick funding timeframes and flexible credit scoring. The typical lack of prepayment penalties makes them an excellent option for fix-and-flip or time-sensitive investments. However, the rates are generally higher.

How to Qualify for Investment Property Loans in Virginia

Although Virginia’s real estate market can provide lucrative investment opportunities, assessing your financial needs and goals is important before applying for a loan. Here are some pointers to help get started:

• Credit and qualifying requirements: Depending on which loan program you choose, a minimum credit score may be required. Analyze your credit score, verifiable income (W-2 or pay stubs), available cash reserves, and any tangible assets that could be pledged as collateral. To learn tips on how to get your credit score as high as possible before applying, download the Griffin Gold app.

• Down payment expectations: Typical down payments range from 10%-20% of the purchase price unless you use a VA loan or FHA loan. If you have challenged credit or are utilizing a riskier loan, that requirement may be higher. Make sure you have plenty of cash available to cover any expected down payment and fees, as well as a “safety buffer” of reserves.

• Debt-to-income ratio considerations: A lower DTI will generally earn more flexible, competitive approval. Work on paying down credit card debt and keeping a consistent pay history before applying.

• Real estate investing experience: In addition to the on-paper requirements, there is a more personal aspect to real estate investment loans: lenders want to see that you are knowledgeable in the local real estate market, are educated, and are prepared to be a successful real estate investor. If you have experience managing property, it’s a definitive bonus. If not, prepare by reading as much as possible or partnering with a seasoned investor before your first purchase.

Why Choose Griffin Funding

Even if you’ve invested in Virginia real estate before, you may miss out on golden opportunities for better approvals or to make your existing investments work for you. Partnering with an experienced and knowledgeable financing partner like Griffin Funding will ensure you’re giving yourself the best chance at wisely financing your next real estate investment – no matter the loan program you choose.

Whether you plan to secure a conventional mortgage loan using your stellar credit, reliable income, and cash reserves, or you’re overcoming credit challenges while looking to buy your first investment property, Griffin Funding can help you find a Virginia investment property loan that works for your unique needs.

Secure an Investment Property Loan in Virginia

Virginia’s deep-rooted government, tech, and education markets have provided a predictably strong, steadily growing real estate market that shows excellent investment potential for the foreseeable future. Steady rental demand in both urban and rural areas means that, with a little bit of local knowledge and a sound financial plan, new and seasoned investors alike can purchase solid investments that will produce many years of steady income and long-term appreciation.

Apply now to partner with Griffin Funding and work on building your real estate investment portfolio today.