Best Use Cases for 30-Year Rental Investment Loans

30-year rental loans for investors

There are a lot of different ways to successfully invest in real estate, but for the purposes of this article, we’re going to talk specifically about long-term investment strategies and when 30-year rental investment loans tend to work best for investors. Whether purchasing or refinancing, there are several scenarios where taking out a long-term rental loan can be advantageous and can help keep your investments cash flow positive in the long run.

The following scenarios are very common instances where we see savvy investors turning to private lenders like us for long-term investment property loans. Rental loans have flexible terms to fit most long-term investment strategies. If you’re curious about terms you might qualify for, check out our investment loan rate calculator and get pre-qualified!

Refinance Out of a Hard Money Loan

If you financed your purchase and rehab with a traditional hard money loan, but you want to hold onto the property (or are just having a difficult time selling it), refinancing the property at its after repair value is a great option to consider. BRRRR investors are well-acquainted with this practice, considering that “Refinance” is the third R in the acronym after the initial Buy, Rehab, and Rent phases. Once you’ve refinanced out of the original loan, you’ll see a big reduction in interest rates which will greatly increase your cash flow from your investment. The rent you collect from your tenants will cover the cost of the long-term mortgage while also putting extra money into your pocket.

Acquire Turnkey Rental Properties

Want to invest in real estate but don’t want to worry about construction permits? Using a 30-year rental loan to acquire a turnkey rental property is a great way to invest. In these cases, it’s sometimes possible to secure a loan even if there aren’t any current leases in place. Working with a private lender is a lot quicker, easier, and generally more convenient than going through a major bank to get a 30-year mortgage for your investment properties, so if this is your investment style, developing a relationship with a lender like Pimlico Capital can make reaching your business goals much easier.

Get Cash Out to Invest in Other Properties

If you have an extensive property portfolio and own any buildings outright, or have low mortgage balances on any of them, you may be sitting on a well of cash that you can tap into in order to free up funds for more investment activity. Especially if the housing market has been hot lately (which it has), your properties could have appreciated quite a bit in value since the last time you financed them. It’s even better when interest rates are at historic lows (which they have been). If you could use some extra cash, you may be qualified to get a cash out refinance of up to 75% of the value of the property with an interest rate in the low 4’s.

Of course, you don’t have to use that cash to invest in more real estate – it’s completely fair if you’d rather take a nice vacation!

Lock in Lower Rates & Increase Cash Flow

If you have existing rental mortgages with substantial balances outstanding, you may want to check up on interest rates. Even cutting your interest rate down by a quarter or half of a point can mean substantial savings for you in the long run – so if you know that interest rates have been trending lower lately, you might want to check in to see what your rate could be.

If any of the above situations sounds like a scenario that you’re in or describes a goal that you would like to accomplish, let’s get in touch. At Pimlico Capital, we take pride in providing superior client service and offering insight wherever we can to ensure that you have the best experience possible working with us.

If you’re looking to grow your real estate business, give us a call at 410-855-4600 or fill out our rate calculator to get started today.