Income Property Mortgage

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. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
  4. Property Management

    The administration of residential, commercial and/or industrial ...
  5. Alligator Property

    In real estate, when the cost of mortgage payments, property ...
  6. Real Estate Investment Group

    An organization that builds or buys a group of properties and ...
Related Articles
  1. Personal Finance

    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. Personal Finance

    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

    Tips For The Prospective Landlord

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

    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.
  6. Personal Finance

    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. Personal Finance

    Tax Breaks For Second-Home Owners

    The tax rules on a second home vary, depending on how the property is used.
  8. Personal Finance

    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.
  9. Managing Wealth

    The Pros And Cons Of Owning Rental Property

    Owning rental property can be a rewarding and profitable experience, but it comes with some real risks.
  10. Retirement

    The Income Property: Your Late-In-Life Retirement Plan

    You're nearing retirement age and you don't have the nest egg you need. Here's how an income property can help you make up the shortfall.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. How does securitization play a role in the implementation of PACE financing?

  4. Can I take a loss on real estate owned and sold as “other investment”?

    I owned a house which we used as our primary place of residence from 2006 - 2009.  Read Answer >>
  5. What criteria does a property need to meet to be considered an 'investment grade' ...

    Learn what it takes for institutional investors to consider a property "investment grade," such as real estate investment ... Read Answer >>
  6. How is Net Operating Income (NOI) used in real estate?

    Find out more about net operating income, what it measures and how it is used to analyze a real estate property's return. Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center