Top financing options for investment properties in 2024

Investing in real estate has always been a popular wealth-building strategy, but securing the right financing can significantly impact the success and profitability of your investment. In 2024, the financing landscape continues to evolve with new products and shifting market conditions that savvy investors need to understand. Whether you are a first-time investor or expanding your portfolio, identifying the best financing options tailored to your goals is crucial. This article explores the top financing methods available this year, examining conventional loans, private lending, portfolio loans, and government-backed programs. By understanding the advantages, drawbacks, and nuances of each, investors can make well-informed decisions to maximize returns while managing risk effectively.

Conventional mortgage loans

Conventional loans remain a cornerstone for financing investment properties. Typically offered by banks and mortgage lenders, these loans require a strong credit score, usually above 700, and a down payment ranging from 15% to 25%. One key advantage is their relatively low interest rates compared to alternative options, making them cost-effective for investors with solid financial backgrounds.

Interest rates in 2024 hover between 6% and 7.5% for investment properties, higher than primary residences but manageable for long-term investments with steady rental income. Conventional loans often come with fixed-rate and adjustable-rate options, giving investors flexibility in managing cash flow and risk. However, strict qualification criteria and the need for personal guarantees might deter newer investors or those with less robust credit profiles.

Private lending and hard money loans

Private lending and hard money loans offer faster access to capital, especially when traditional lending requirements are too restrictive. These loans are typically funded by private individuals or companies rather than banks and are based more on the property’s value than the borrower’s creditworthiness.

While interest rates on hard money loans can be high—often between 10% and 15%—they usually have shorter terms, such as 6 to 24 months, making them suitable for fix-and-flip projects or quick acquisitions. Investors appreciate the speed of approval and fewer documentation demands but must account for higher costs within their financial planning to ensure profitability.

Portfolio loans and multi-property financing

For investors holding multiple properties or planning to acquire several units, portfolio loans provide a flexible solution. Unlike conventional loans sold to secondary markets, portfolio loans stay on the lender’s books, allowing for customized underwriting and terms that reflect an investor’s overall financial strength and real estate experience.

These loans often facilitate financing for more than four units, helping diversify portfolios beyond single-family homes. Additionally, lenders may offer interest-only payments during initial periods, increasing short-term cash flow. Although interest rates are slightly higher than conventional loans, the tailored service and ability to bundle multiple properties under one loan can improve operational efficiency.

Government-backed loan programs

Several government-backed loan programs remain viable options for investment financing in 2024, particularly for residential investment properties with limited units. Programs such as FHA loans allow for financing with as little as 3.5% down, but only if the borrower intends to occupy one of the units as their primary residence, which can include multi-family homes up to four units.

VA loans offer similar benefits for eligible veterans and active-duty personnel. While these programs generally impose owner-occupancy requirements, they provide lower interest rates and reduced down payment barriers, opening doors for smaller-scale investors aiming to build portfolios incrementally. Understanding the eligibility constraints and strategic use of these loans can help investors enter the market with less upfront capital.

Summary and final thoughts

Navigating financing options for investment properties requires balancing immediate access to capital, long-term interest rates, and qualification criteria. Conventional loans continue to serve as the most affordable and accessible financing for investors with strong credit and down payments, while private lending can accelerate acquisitions when quick action is needed despite higher costs.

Portfolio loans offer scalability and flexibility for managing multiple properties, supporting portfolio growth strategies effectively. Meanwhile, government-backed programs provide valuable opportunities for investors who qualify, particularly if owner-occupancy is part of the strategy.

Successful real estate investment starts with choosing the right financing that aligns with your investment goals, capacity, and timeline. By understanding each option’s strengths and limitations in 2024’s market, investors can optimize their capital deployment and improve their prospects for sustained financial success.

Financing option	Typical down payment	Interest rate (2024)	Term length	Best suited for
Conventional loans	15–25%	6%–7.5%	15–30 years	Experienced investors with strong credit
Private/hard money loans	Variable (often 20%+)	10%–15%	6–24 months	Fix-and-flip or quick acquisitions
Portfolio loans	15–25%	6.5%–8%	Variable, often 5–10 years	Investors with multiple properties
Government-backed loans (FHA, VA)	3.5% (FHA)	4.5%–6%	15–30 years	Owner-occupant investors and veterans

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