Loans for investment properties can vary significantly, but ultimately, the best investment property loans have a low interest rate, a term length that fits your investment plan, and reasonable eligibility requirements for investors.
That said, here are my picks for the six best investment property lenders:
- Kiavi: Best for quick and easy funding
- Lima One Capital: Best for flexible rental property financing
- Visio Lending: Best for short-term rental properties
- RCN Capital: Best for experienced investors
- Lendio: Best for commercial properties
- Pennymac: Largest variety of investment property loans
- Best investment property loans compared
- Kiavi: Best for quick and easy funding
- Lima One Capital: Best for flexible rental property financing
- Visio Lending: Best for short-term rentals
- RCN Capital: Best for experienced investors
- Lendio: Best for commercial properties
- Pennymac: Largest variety of investment property loans
- Methodology: How I evaluated the best investment property loans
- Factors for choosing the best loan for your investment property
- Alternative loans for investment properties
- Frequently asked questions (FAQs)
Best investment property loans compared
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Kiavi: Best for quick and easy funding
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Loan types
DSCR loan terms
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Why I chose Kiavi
Kiavi is an online real estate lender that offers a variety of the best loans for real estate investors, from fix and flip loans to rental portfolio loans. It even topped our list of the best fix and flip loan providers for its easy process. Its online platform makes the application and funding process very easy and allows you to get funding in as little as seven days, depending on the type of loan and size.
The lender also offers competitive rates for applicants with strong credit. While its rental property loan selection is more limited, it stands out as a good choice if you value a straightforward, fast lending experience.
Lima One Capital: Best for flexible rental property financing
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Loan types
Single-family rental loan terms
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Why I chose Lima One Capital
Lima One Capital is another online lender that offers a variety of funding for different types of investors, like commercial property investors, developers, and flippers. It stands out from other lending options because of its loan options for rental property owners.
It offers three different types of rental property loans, each with very flexible terms: portfolio rental, single-family rental, and short-term rental loans. Because of this range of options, I recommend Lima One Capital if you’re seeking flexible rental property financing.
Visio Lending: Best for short-term rentals
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Loan types
DSCR loan terms
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Why I chose Visio Lending
With Visio Lending, there are two types of DSCR loans for rentals: one for long-term rental properties and another for short-term rental properties. DSCR loans are one of the best loans for an investment property because they are based on the income generated by your rentals instead of your personal income. Plus, Visio’s short-term rental loan offers a fixed rate and up to 80% loan-to-value, making it easy for you to grow or start a vacation property investment.
RCN Capital: Best for experienced investors
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Loan types
Long-term rental loan terms
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Why I chose RCN Capital
RCN Capital is known for its broad selection of investment property loans, covering everything from new construction to portfolio financing and long-term rental loans. It stands out for its practice of shaping loan terms around your credit history and business performance, which can give experienced investors more flexibility in how they structure their financing.
For example, its long-term rental loan will finance up to 80% LTV if you have a credit score over 700. If your credit score is under 680, it will only cover up to 70% LTV. This makes RCN Capital the best loan for experienced investors to get the best rates.
Lendio: Best for commercial properties
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Commercial mortgage loan terms
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Why I chose Lendio
Lendio isn’t a direct loan provider; instead, it is an online loan marketplace with over 75 partnering lenders. Even though it isn’t a real estate-specific lender, it has the ability to offer some of the most competitive commercial real estate loans on the market.
It is one of the few online loan brokers to provide a conventional commercial mortgage option with flexible terms and the ability to get funding in eight weeks or less. It also has SBA loans, which are ideal for funding commercial real estate. Overall, it offers the best investment property loans for commercial real estate investors and even makes our list as one of the best commercial real estate lenders.
Pennymac: Largest variety of investment property loans
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Loan types
Conventional mortgage loan terms
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Why I chose Pennymac
Pennymac is a mortgage lender that offers the widest variety of real estate loans on this list. While many of its mortgage loans are meant for residential properties, they can be used for investment properties and even have benefits like a low 15% down payment.
It is one of the few investment property loan providers that offers VA loans for primary residences and investment properties. Keep in mind that mortgages typically offer the lowest interest rates of all the types of investment loans — for example, Pennymac’s current interest rate for a jumbo mortgage starts at just 5.875%.
Methodology: How I evaluated the best investment property loans
Our methodology at The Close is to provide real estate business owners with the most accurate and objective information to help them make the right business decisions. Our team of professionals, researchers, writers, real estate agents, and experts has done detailed research to evaluate the best lenders for real estate investors.
Our criteria include:
- Loan types: Since there are many different ways to invest in real estate, I looked for loan providers that offered a range of financing options for investors.
- Loan terms: I carefully considered the terms of each loan that I chose as the best loan for investment property owners, looking specifically at interest rates, short and long-term payment structures, and fees.
- Eligibility: I chose loan options with eligibility requirements that most real estate investors can meet, looking at business requirements, minimum credit scores, and types of properties the lender approved.
- Availability: Given that the intent is to support investors all over the country, I chose providers with a wide reach.
- Customer reviews: I selected lenders with strong reputations and excellent customer reviews.
Factors for choosing the best loan for your investment property
When residential home buyers think about buying a home, they only have a few options to choose from. In contrast, investors have quite a few financing options spanning various loan types and lenders. As such, it can be hard to pinpoint what type of financing might best suit your investment needs.
There are a few factors you should take into consideration before signing on the dotted line of a loan agreement. Here’s what you need to review when choosing between the best lenders for investment properties:
- Type of investing: Consider how you’ve invested in real estate so far and your future plans. This may help you get a clearer understanding of what you can afford and how your ideal loans should be structured.
- Type of financing: Each type of loan offers different interest rates, eligibility criteria, and terms, so see to it that you understand the pros and cons of all your options.
- Eligibility and terms: In general, financing options with fewer eligibility criteria have higher interest rates. Ensure you understand what you can qualify for and the specific long-term impact of each potential choice.
Looking to start investing in commercial real estate? Check our guide on how to buy commercial real estate to get started.
Types of investment property loans
In general, investment property loans are mortgages or loans that are used to finance an income-generating property, like rental properties or commercial properties. When people talk about loans for investment properties, they could actually be referencing a wide range of loans.
However, the following are generally considered the best loans for investment property:
| Type | Pros | Cons |
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| Conventional loans (mortgages) |
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| DSCR loans (debt service coverage ratio) |
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| Portfolio loans |
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| Commercial investment loans |
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| Home equity loans |
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Alternative loans for investment properties
There are different types of real estate investing, each of which requires various steps and strategies. That said, you might need to explore other financing opportunities if none of the typical methods fit your needs.
- Hard money loans: Best for fix-and-flip investors or those looking for short-term financing, these loans come from a hard money lender. It typically has fewer eligibility requirements but higher interest rates. For options, check our guide to the best hard money lenders.
- Business loans: General business loans can be used when you don’t meet the criteria for real estate-specific financing. They can be short or long-term but may have higher interest rates than conventional financing. These are typically a good option if you need to do renovation or maintenance work for a property. Consider a broker such as Lendio to help you review your options. Visit Lendio to learn more.
- Bridge loans: These short-term loans are meant to be used when there’s a gap between your immediate financial needs and your long-term financing plan. Bridge loans are perfect if you have quick investment projects that you plan to sell or refinance.
- FHA loans: FHA loans are provided by the Federal Housing Administration. There are FHA loans for primary residences and FHA loans specifically made for multifamily properties, which typically offer more flexible qualification criteria. For more details, read our guide on FHA loan requirements.
Frequently asked questions (FAQs)
The most common and most popular type of loan for investment properties is a conventional mortgage. However, owners of multiple rental properties often use portfolio loans (or blanket loans) to consolidate their payments. DSCR loans are also popular options for rental property owners to finance an investment based on their property’s revenue and not their personal income.
While most investment property financing will require 20% to 30% down, this can vary widely, and there are exceptions depending on the loan type, the lender’s preference, and your creditworthiness as a borrower.
Not necessarily. It really comes down to your experience and qualifications. Getting a loan for an investment property can be more challenging than getting a mortgage for your primary home, as investment properties are considered to be riskier. As such, they tend to have higher eligibility requirements, and you typically need a larger down payment.