Can I afford an investment property? How much down payment do I need? Your credit history, down payment amount, and other factors may determine the terms of your investment property loan. You should aim to put down fifteen to thirty percent of the purchase price. While you may be able to borrow more than that amount, the loan’s interest rate is usually higher. As such, an investment property loan may not be the right choice for everyone.

When determining your rental affordability, you need to look at how much the property rents for in your area. The price of your investment property should be within 1% of your income. It is also important to consider whether you can afford property taxes. High property taxes can wipe out any profit you made from renting the property. A low tax rate will allow you to earn more rental income. However, remember that you must also consider the risks and expenses of owning a rental property.