DEFINITION of 'Income Property Mortgage'

A loan given to an investor to purchase a residential or commercial rental property. Income property mortgages are typically much harder to qualify for and often require a borrower to include estimates of the rental income that will be received from the property. Unlike owner-occupied and single-family residences, there are few government loan programs to assist in the purchase of income properties. This leaves investors at the mercy of private lenders, who themselves are at the mercy of the credit markets.

BREAKING DOWN 'Income Property Mortgage'

Owning a rental property is one of the most common real estate goals of individual investors. Accomplishing this goal however, is much harder than the late-night infomercials would make it seem. The biggest hurdle in acquiring rental properties is securing an income property mortgage, which generally requires a larger down payment than the purchase of a primary residence. Typically, an income property mortgage requires a larger down payment relative to personal home mortgages.

RELATED TERMS
  1. IRS Publication 527 - Residential ...

    A document published by the Internal Revenue Service (IRS) that ...
  2. Residential Rental Property

    A type of property that derives more than 80% of its revenue ...
  3. Property Management

    The administration of residential, commercial and/or industrial ...
  4. Income Approach

    A real estate appraisal method that allows investors to estimate ...
  5. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
  6. Alligator Property

    In real estate, when the cost of mortgage payments, property ...
Related Articles
  1. Taxes

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  2. Investing

    3 Reasons to Invest in Multi-family Real Estate

    Here are three reasons to consider investing in multi-family real estate as opposed to single unit rental properties.
  3. Retirement

    Generate Income For Retirement with Real Estate

    Learn whether rental income is compatible with your lifestyle, how to identify suitable properties, common pitfalls to avoid and how to secure financing.
  4. Investing

    Rent Revenue: A Growing Income Source for U.S. Households

    Never before has rental revenue represented such a large share of income gained by American households.
  5. Investing

    Tips For The Prospective Landlord

    Investing in rental property can generate serious income, but there's more to it than collecting rent.
  6. Taxes

    How To Prevent A Tax Hit When Selling A Rental Property

    Rental property ownership has its benefits but when selling you can face a big tax hit. Thankfully there are ways to reduce your capital gains exposure.
  7. Investing

    Is It Worth Buying A Second Home To Rent?

    Mortgage interest rates are low, but consider these dos and don'ts before making the leap into rental property ownership.
  8. Investing

    Tax Breaks For Second-Home Owners

    The tax rules on a second home vary, depending on how the property is used.
  9. Taxes

    Sell Your Rental Property For A Profit

    Being a landlord can be taxing, especially when you want to sell. Find out how to reduce your burden.
  10. Investing

    Use Real Estate To Put Off Tax Bills

    Find out how you can build wealth and reduce your taxes.
RELATED FAQS
  1. Is it possible to refinance a house you're renting out?

    Find out whether it is possible to refinance rental property. Lenders have strict qualifying standards and expect owners ... Read Answer >>
  2. What do real estate investors look for in a property?

    Profit from real estate investments by either flipping homes or becoming a landlord. Learn best practices for a successful ... Read Answer >>
  3. An appraiser forms the following estimates for a rental property ...

    Free info on financial certification exams including study guides, exam questions, and much more! Read Answer >>
Trading Center