Have you ever wondered why you should invest in real estate? In fact, it’s pretty simple. Property has withstood the test of time as one of the preferred investment assets. In fact, rental properties are still a good investment even when interest rates rise.

Compared to other options such as stocks, bonds, and financial investment vehicles, real estate can guarantee you steady returns, appreciation in value, and also offer you some much needed tax advantages.

Now that you understand why, you might wonder how to invest in real estate? And where do you get the financing?

Investing in real estate is quite capital-intensive. Before thinking of the different kinds of financing you can get, you should self-evaluate your finances. You might have missed some potential recurring hidden costs. Few assets can match the initial capital outlay needed for real estate investment, but this shouldn’t scare you.

In this article, the team from Gifford Property Management outlines the various ways that you can finance your ideal property investment. Keep reading to learn more!

Available Financing Options

Bank Loan

a mortgage broker writing down interest rates

This is the most common and traditional method of obtaining finance. The bank will have a look at your credit score and history compared to what you are requesting for in or, in this case purchasing, to see if you can afford it. They will also review any assets that you may have at that time.

Before selecting a bank loan, we recommend new property owners to look at several mortgage institutions.

You should do thorough research before choosing a bank. Why are they not offering what Bank X is offering? Are you willing to add this clause and remove that? When you consider that banks are also businesses, you won’t just sign any document presented to you.

Hard Money

Compared to a conventional banking loan, this is often a short-term loan given to you with a repayment period offered only a few months. Given the nature of the financing, it would be ideal to consider a short-term investing strategy such as fixing and flipping.

The terms in a hard money loan would be more convenient for you and easier to qualify for one. However, the interest terms on them can be quite high.

While a typical mortgage might be dealing with single digits, such loans could be doing double digits. As they say, high risk, high return.

calculator with money around it

Private money

Do you have any family that owns a significant amount of money or assets? You can approach them and request for a private loan. This could be some of the cheapest money in terms of interest rates that you can obtain.

If family and friends are not an option, we recommend that you network in real estate investment groups and events.

There are always investors and risk-takers in such places. With pertinent information on your property, you could be able to convince one.

Tips for Financing

A Down-Payment

Down payment for the property is often required by most, if not all financial institutions. It usually ranges around 20% of a building’s market price.

With this percentage, you will be given the typical loan terms. However, if you put down a more sizable deposit, the bank should be willing to give you better terms.

This is because you are considered a less risky client. By putting down more equity, the bank doesn’t have to risk more of its money should you default.

Improve Your Borrowing ‘Strength’

a person sitting at a desk looking over financial documents and using a calculator

Even when you have a strong income stream, the bank will eventually consider your character and history as a borrower. Your credit score is a metric of how risky you are as a borrower.

How do you improve your credit score? Months before approaching the bank for financing, you should start paying your debts periodically and on time. Don’t be late on even a single one. This will improve your chance of getting better loan terms.

Think Local

When it comes to finance, most property owners think that going for international or national institutions is best. After all, they have a strong credit line, are stable, and have branches all over the nation.

However, we think that you should consider your local bank to finance your investment property. These banks have a better appreciation of the local market and also are a tad friendlier. This may work in your favor especially when finances are a bit tough.

Financing from the Owner

It might be that you are unable to secure financing for one reason or another. It’s a common story that we have had in our industry. The banking industry has set quite strict terms that not every potential property owner can meet.

You should consider owner financing. After identifying the property, approach the owner with favorable terms (not too favorable though) and, of course, a deposit.

If you are unsure of how to go about it, you can ask a local property firm to set up the papers for you.


With our comprehensive article, you know now how to invest in real estate.

Each method has its criteria and its risks. Before you choose one over the other, you should make sure that you have read comprehensively about what it offers.

If you find yourself overwhelmed with this myriad of information, and you want to take a more relaxed role in the investment process, you can consider getting in touch with the local property experts, Gifford Properties & ManagementCompany.

We are the leading experts for all property issues in Fleming Island and Jacksonville. Our clients based in Mandarin, St. John’s County, Ponte Vedra, Orange Park, and Green Cove Springs can attest to the quality of our services. Get in touch with us today and receive a quote for our services.