» DOUBLE DOWN: Expect to break the piggy bank open — wide open. “You usually need a minimum of 15 percent down for an investment property, and, ideally, for good pricing, it should be 20 percent,” says Will Gaines, senior loan officer with Access National Mortgage in Reston, Va. “To get your very most competitive pricing, you really need to have 30 percent to put down.”
» DOUBLE TROUBLE: Don’t blame the banks for tighter restrictions. “The private mortgage insurers got burned so, so bad in the past few years, and they’re reluctant to provide insurance,” warns Katie Wethman of Long & Foster. She says they’re especially wary of insuring rental properties because “if a borrower falls on hard times, they’re more likely to skip a payment on an investment property than one they live in.” That said, she advises borrowers to come up with a big chunk of cold, hard cash to sweeten the deal; the less credit you need, the more likely you are to get the loan you want.
» DOUBLE UP: Count on your friends. “I see more younger people going in together to buy investment properties,” Gaines says. “That way, they can share the down payment and spread out the risk if they’re without a renter for a period of time.” Be sure to have a game plan for buying each other out in case one of you is ready to cry “Uncle!” before the other.