Why 30-Year Rental Loans are the Best Fit in Today’s Market

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

When it comes to financing a rental property, there are typically two overarching schools of thought. Some landlords seek to pay off their loan as fast as they can, thinking that after they fully own the property, they’ll free up more cash flow that can be allocated to savings or reinvested in the form of property upgrades or the acquisition of more properties to diversify their portfolios.

But what if you need to optimize cash flow now—before your rental property is completely paid off? What if you need a more flexible payment structure or you need cash on hand to take advantage of a time sensitive opportunity with promising future return on investment? That’s where the second repayment strategy comes into play—one that is proving extremely popular in today’s extremely active market.

Historically low interest rates combined with exponentially-increasing transaction rates and severely reduced housing inventory levels across the country make it the perfect time to make major real estate investment moves. The low availability of affordable housing options in essentially every market in the United States has prompted tenants to trend towards renting their homes instead of purchasing—and they’re willing to pay optimally for the right space.

Don’t miss out on this once-in-a-lifetime market dynamic. With Alpha Funding Partners 30-year loan program, you can pay significantly lower monthly installments with favorable terms, which means you have more cash on hand to revitalize your investment strategy. There are still an abundance of great rental units available on the market in areas where the average monthly rental income is set to explode. The wide-scale migration from crowded urban areas to the suburbs as a result of COVID-19 has seen once-dormant markets revitalized—and savvy investors can set them up for long-term earnings by anticipating the trend and locking in rental properties in these in-demand locations.

But doing so requires capital—and what options does an investor have that already has one or more rental loans and no expendable cash to use for additional investments? The answer is converting to Alpha Funding’s 30-year loan. True, you will be making payments for a longer window of time, but you are also paying less on a monthly basis, enabling you to upgrade your investment business with the available cash now, instead of being forced to wait until the loan is fully paid off.

Are you considering buying a rental property but are looking to then sell it before it is fully paid off? A longer-term rental loan is more advantageous in these scenarios as well. Why rush to pay off a loan that will be off of your books in the relatively near future? A smarter approach is to pay as little as possible per month and use the extra cash to make property upgrades so you can resell it for the highest price point as possible.

Investors with shorter-term loans that carry with them high monthly payments are left with no expendable income to maintain or improve their properties. Every single time there’s a turnover of tenants, landlords have to at the bare minimum repaint some or all of the property, clean the carpets and make repairs. These essential steps don’t come cheap, and how will you afford them when all off your budget is devoted to making loan payments?

Today’s average tenant has a ‘wish-list’ of non-negotiable amenities and property features that they want in a rental unit. In order to attract the best-paying, reliable tenants, you will most likely have to make consistent upgrades and additions to your property—whether that’s appliances, remodeling or fixtures. With Alpha Funding Partner’s 30-year loan, you will have the money to do so, giving you the potential to optimize your monthly cash flow by charging premium rent rates to prospective tenants.

More To Explore