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Credit Scores = ROI Profits for Real Estate Investors
Jeanette Joy Fisher, Knowledge Level: , Keywords: credit scores = roi profits for real estate investors by jeanette joy fisher
However, the real money making difference for real estate investors comes into play in the return on investment (ROI). When you build up your credit score over 720, you open the way to finance multiple investment properties using other peoples money. Today, you can get investment property financing for as little as 5% down when you meet the qualifying credit requirements. This means that your ROI on your cash investment for the down payment can be significant.
For example, lets take a home I found in Bradenton, Florida. Built in 1999, this 3 bedroom, 2 bathroom, 1600 square foot home looks like a great buy for only $219,000. Assume that the property could be purchased for $215,000. With strong credit, the 5% down cash investment of $10,750 buys into the appreciation value of $215,000. A lower credit score would mean that youd have to put 10%-25% down or more, which lowers your return on investment. You would need $21,500-$53,750 down to buy into the same $215,000 appreciation investment. In this case, your ROI for your cash outlay would decrease significantly.
Of course, other factors like carrying costs affect your investment capabilities. The point: get your credit score over 720 so that when youre ready to buy investment property, you get the best return on your money.
Copyright 2005 Jeanette J. Fisher. All rights reserved
Jeanette Fisher, author of Credit Help! Get the Credit You Need to Buy Real Estate, interior design, and real estate books, has researched mortgage credit qualifications besides credit scores to finance multiple investment properties. Jeanette teaches college courses on Design Psychology and professional real estate investing seminars. For free "Credit Tips for Mortgage Financing" report, visit the Real Estate Credit Help Center at recredithelp.com
Article Source: EzineArticles.com
Strong credit saves real estate investors money on mortgage finance costs. A good credit score, along with the other credit and mortgage qualifications, means that investors can pay lower fees for fin. Article on credit scores = roi profits for real estate investors by jeanette joy fisher by Jeanette Joy Fisher
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