With summer temperatures rising, now’s the time to invest in real estate along the Jersey Shore. By purchasing multiple properties and leasing them out as short-term vacation homes, investors can make a fortune on seasonal beach goers. Yet, before you go out and buy a collection of homes or apartments, be sure to prepare your finances and research the market.
Buying multiple properties is a wise investment, especially across the New Jersey shoreline. With any investment, though, you should be careful to do your due diligence before purchasing. This means guaranteeing that your credit is acceptable, finding secured financing, and locating the most profitable areas to invest in. Whether you’re looking for homes for sale in Margate NJ or other areas, this article will help you prepare for your investment and guide you through the process.
Understand How Credit Can Affect Your Purchases
Your credit score is one of the most important things to consider when you’re making any large purchase, especially if you’re buying multiple properties. This becomes especially relevant if you’re purchasing your fifth-through-tenth property.
At the most basic level, a high credit score will grant you access to better interest rates on your mortgages, meaning you can save more money in the long run. If your score is low, you may still qualify for a loan, but it will come with a higher interest rate which will eat into your profits.
At a deeper level, though, you could be disqualified for financing if your score isn’t high enough. According to guidelines set by Fannie Mae, investors must have a score of at least 720 to qualify for financing on fifth-through-tenth properties, along with down payments as high as 30%. If you cannot meet these requirements, you’ll be disqualified before you even set foot in the door.
Find Secured Financing
When you’re buying multiple properties, you’ll likely need to take out a loan in order to finance the purchase. There are a few different types of loans you can choose from, but the most common for investment properties is a portfolio loan. This is a type of loan that allows you to use multiple properties as collateral, which can help you get a lower interest rate.
Another option is to get a home equity line of credit (HELOC). This is a loan that uses your home as collateral and can be a good option if you have a lot of equity in your property. The downside to a HELOC is that you may end up paying more in interest over time.
Research the Market
When you’re buying multiple properties, it’s important to choose locations that will be in high demand. This means doing your research to find out which areas are growing, have a lot of amenities nearby, and are close to tourist attractions.
The Jersey Shore is a great place to invest in real estate because it’s a popular spot for tourists. Another benefit of the Jersey Shore is that there are many towns to choose from, so you can find the perfect location to fit your needs. Some things to consider when choosing a location include:
- The local economy
- The crime rates
- The quality of schools
- The cost of living
Once you’ve chosen a location, you can start looking for properties. Be sure to work with a real estate agent who knows the area well and can help you find the best deals.
Buying multiple properties is a great way to invest in real estate, but it’s important to be prepared before you make any purchases. Be sure to check your credit score and DTI, secure financing, and do your research to find the best locations. With a little preparation, you’ll quickly attract beachgoers and turn a profit on your investment.