How much down payment do I need to buy a rental property?

Asked by AASeattle, Seattle, WA Thu May 8, 2014

I am thinking of buying a house in the Central District (closer to Capitol Hill side) to rent out. How much down payment do I need? Is 20%, 30% or more?

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Mon May 12, 2014
20% down is fine ...but rates / fees much better with a 25% down
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Valerie D'Am…, Agent, New York, NY
Mon May 12, 2014
you will need a FICO score of 740 or above, 20-25% down payment depending on the loan institution and a good realtor to negotiate the price to an acceptable figure for you to make the highest return on investment possible.
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Jeremy Locke, Mortgage Broker Or Lender, Kirkland, WA
Mon May 12, 2014
It will depend on your credit score, as well as a few other requirements. Contact me directly for details.
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Ray Akers, Agent, Seattle, WA
Sat May 10, 2014
Lending guidelines have been tougher since the Great Recession. Recently, we've seen lenders offering more loan options. I know of a local credit union offering 20% down non-owner-occupied loans. In most cases, you'll need to have a down payment of 25%. If your FICO score is over 750, you'll have more choices at lower interest rates. If you need a referral to a lender, feel free to get in touch with me. Good luck.
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Marilyn Cunn…, Agent, Gainesville, VA
Fri May 9, 2014
Banks will differ depending on the property but a general rule of thumb is 25% to 30%.
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Brian Nguyen, Mortgage Broker Or Lender, Mission Viejo, CA
Fri May 9, 2014
Usually when it comes to rental properties or investment properties you will need a higher down payment. A higher down payment is required because investment properties are usually riskier for a lender to fund. So I would say that you would need at least 20% or maybe more. The best thing for you to do is to speak with a knowledgeable lender like myself to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!

Brian Nguyen
Sr. Mortgage Banker
NMLS # 659743
Phone: 949.667.2887
0 votes
Dan Tabit, Agent, Issaquah, WA
Thu May 8, 2014
It will depend on several factors, your credit being chief among them. 20% may be possible, but 25% may be more common. Buying investment property can be a great way to gain wealth, but you must qualify for the home without it being rented first. Most lenders will not anticipate your income, but would use it for a refinance once you have an established history of receiving it.
Your first step will be to meet with a great lender experienced with this to find out if you qualify and under what terms.
If you need a local referral feel free to contact me. I have some great lending sources, having been a licensed lender for many years.
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