How to Finance a Short Term Rental in Myrtle Beach
about 1 month agoMyrtle Beach, SCScore: 82
Summary
This episode of the Short Term Show focuses on financing short-term rentals in Myrtle Beach. The episode covers conventional loans, second home loans, investment loans, and jumbo loans, with advice on how these apply to condos and single-family homes, and how to maximize your strategy for obtaining multiple loans.
Key Insights
- •Conventional investment loans require a minimum of 15% down payment, whereas second home loans have a 10% down payment requirement.
- •Jumbo loans for investment properties require 20% down, while second home jumbo loans allow 10% down.
- •With conventional loans, you can only get 10 of these, whether it is an investment loan or a second home loan, collectively. However, if you are a two income household, you can strategize and potentially obtain up to 20 collectively if you alternate whose name is on the contract.
- •Condos in Myrtle Beach are predominantly non-warrantable, which means they cannot be financed conventionally. Single-family homes make up about 25% of the market.
Action Items
- ✓When planning multiple conventional loans, be mindful of your debt-to-income ratio and the timing of your tax filings, as short-term rental income is not applied until the tax return is filed.Effort: lowImpact: medium
- ✓If buying in a market with a limit to second home loans, consider putting down the extra 5% for an investment loan if you are trying to acquire more properties, and want to avoid mortgage fraud.Effort: lowImpact: medium
Watch Out For
- ⚠A common mistake is assuming Jumbo loans are difficult to finance. They are not. They are qualified the exact same way as a conventional loan.