Financing an investment property in Ashland, Oregon

Still searching for the right place to buy an investment property? Ashland, Oregon deserves to be on your list. Despite its small area (6.64 square miles), this city in Jackson County makes an ideal location for financing an investment property because of its vibrant combination of industry and culture.

Ashland has steadily built a reputation as a producer of top quality wines – a reputation that led to significant growth in tourism and real estate purchases in the area. Aside from its grape-friendly terrain, Ashland is also famous for events like the Oregon Shakespeare Festival and a great many wine-tasting experiences. All these combine to make Ashland a terrific place not only for visiting, but also for living in. And real estate investors have taken notice.

While many real estate investors have seen success in Ashland, financing an investment property also comes with many associated risks, and anyone who doesn’t do their share of due diligence stands to lose a lot of money. This makes it crucial for you to take extra precaution to ensure your profit from your investment, if not prevent a huge loss. Here’s what you need to know about financing an investment property in Ashland.

Real estate investing: Definition and types

Real estate investment is a transaction that involves the purchase of a property for the purpose of generating income instead of being a primary dwelling. Investments are often associated with commercial buildings, vacant properties, agricultural land, and the like, but even a house can serve real estate investment purposes. There are six major classifications of real estate investment, and these are the following.

1. Commercial

   Commercial real estate represents properties that are designed for business operations and services. Examples of commercial properties include office spaces, retail stores, gas stations, hotels, hospitals, etc. Investors in commercial properties usually rent out the space to businesses that can meet the requirements and pay rent on time.

2. Industrial

   Industrial properties refer to structures that house industry-related activities such as manufacturing, warehousing, assembly, research, logistics, and more. These properties are often large in scale and built a good distance away from residential and commercial areas, as industrial activities tend to introduce noise, traffic, and other undesirable impacts to the community.

3. Residential

   Easily the least complicated type of real estate investment, as anyone with a budget for a second home can enter into some type of residential real estate investing. These include single-family homes, apartment complexes, townhouses, condos, etc. Buying another home is a great way to start if you’re just starting your real estate investing journey. The ROI is speedy, the risks minimal, and you can earn a lot of first-hand experience along the way.

4. Raw land

   Raw land refers to undeveloped or vacant properties. It is often the cheapest form of real estate investment, although the price tag can certainly vary depending on size and location. Many raw land investors erect buildings and other forms of infrastructure for commercial, industrial, and even agricultural purposes. Others will lease or hold on to the property until such time that the value has increased significantly.

5. Real estate investment trusts(REITs)

   REITs are entities that oversee passive real estate investments that often come in the form of publicly traded stocks. REIT investments can be made through mutual or exchange-traded funds, so instead of owning the properties yourself, you can generate income as the REIT earns from its managed properties. You have very little involvement, and you can see a steady although small stream of income.

6. Real estate crowdfunding

   A relatively new type of real estate investing, real estate crowdfunding allows investors to pool their funds and invest in properties that would be impossible to finance on one’s own. Real estate crowdfunding acts like REITs, although it usually requires less investment money than the latter, and most of the transactions are managed through an online crowdfunding platform.

Four biggest considerations before investing in real estate

They say that buying a house is the biggest investment that one can make, and financing an investment property is basically the same thing. With the significant amount of money that you’re putting in, it’s best that you do your homework before committing your finances to the endeavor. You boost your chances of success in real estate investing when you have the knowledge to make sound investments.

1. Find the right property/ies

   Take the time to find the right Ashland investment property to buy. Assess the feasibility of a property by researching the neighborhood, knowing the popular industries in the community, undertaking a comparative market analysis, and determining the site’s profit potential. All of these can be done with the help of a knowledgeable local real estate professional.

2. Understand different potentials for profit

   There’s more than one way to earn from your Ashland investment. Common methods include leasing the space out to a tenant, holding on to the property and waiting for it to appreciate, or flipping and selling it for big gains. Other examples include:

   • Vacation rental is a type of short-term leasing that has the potential to become a substantial passive income stream, especially during tourist seasons.
   • Hard-money lending allows you to venture into the lending industry and use your property as capital.

     Depending on the direction you choose to go with your purchased property, you can either earn a passive or active income stream from your investment.

3. Shop for the right mortgage

   Understand the types of mortgages available to you, and get to know the advantages and disadvantages of each. Many lenders offer real estate investors with a wide range of options, so you need to weigh each available option carefully. The most common loan types available to real estate investors include:

   • Fixed-rate mortgage loan. A loan that lets you pay the same amount of interest rate for the lifespan of the loan.
   • Adjustable-rate mortgage loan. A type of loan where the interest rate will increase or decrease depending on the dictates of the market.
   • Conventional loan. Typically available to borrowers with excellent credit scores or remarkable debt-to-income ratio.
   • Federal Housing Administration (FHA) mortgage insurance program. A type of insurance insured and approved by the FHA that usually requires smaller down payments than regular loans, sometimes as little as 3.5% of the home price.
   • US Department of Agriculture loan. Designed for low- and middle-income borrowers in rural areas. Like an FHA loan, a USDA loan has low down payment requirements, but it comes with many limitations, including the size of the home (must be 2,000 square feet or less), and location (must be in a rural area).
4. Know the dangers of little to no down payment

   Buying an investment property with little to no down payment is an attractive proposal, but it has many major drawbacks. You need to pay a higher interest rate or buy private mortgage insurance. Nevertheless, as long as you have a strategy to minimize the risks, mortgages with little or no down payment can still work to your advantage.

Why invest in Ashland, Oregon?

As Ashland continues to grow economically, it is fast becoming one of the better places for financing an investment property. Here are some statistics to help sway you on why you should put your money on an Ashland, Oregon investment property.

• The city’s population growth averages 0.45% annually, and it has been that way for the past decade.
• The presence of Southern Oregon State University makes Ashland a virtual college town, providing investors with a youthful market.
• With the growing presence of major companies like Walmart, Charles River Laboratories, and Mansfield Plumbing, commercial property investors could strike it big by investing in office buildings and industrial spaces in the area.
• 48% of the population are renters, making the city ideal for rental real estate investors as well.

Indeed, financing an investment property in Ashland, Oregon could be the smartest move you make with your money. For investors looking for a commercial property, vacation home, or rental property, Ashland, Oregon is a prime option.

Why buy a home in Ashland, Oregon?

A great place to invest in is basically a great place to live in, and this holds true for Ashland. Here are four good reasons you might want to establish your roots here.

1. Wide open spaces

   Lovers of nature and outdoor pursuits will find plenty to enjoy in Ashland. Thanks to good year-round weather, residents and visitors alike can enjoy hiking and cycling on miles of amazing trails, or go rafting, jet boating, and swimming on Rogue River. During winter, nearby Mt. Ashland also allows for some skiing and snowshoeing fun.

2. Nature at its heart

   Right in the middle of downtown Ashland sits Lithia Park, a natural sanctuary spanning 93 acres of forested canyon land, complete with landscaped lawns, pickleball courts, sandpit volleyball courts, picnic areas, and playgrounds for the little ones. Peace and quiet is within easy reach wherever you may be in Ashland.

3. Extraordinary sights all around

   Should you wish for a change of scenery, there’s also plenty of beautiful panoramic views to enjoy at the many popular places nearby, such as the Oregon Coast and the Redwoods in the west, Crater Lake in the north, the Cascades in the east, and Mt. Shasta down south.

4. Stylish urban lifestyle within easy reach

   At Ashland, you’re never too far away from life’s modern conveniences. The downtown in particular, is home to a wide array of shopping choices that include retail shops (Tamada, Sunday Afternoons, Massif), bookshops (Ashland Book Exchange, Bloomsbury Books, Soundpeace), gift boutiques (Paris Green, Pelindaba Lavender, North & East Co.), cafes (Rogue Valley Roasting Co., Case Coffee Roasters, Morning Glory Café), and department stores (Paddington Station, Bi-Mart Membership Discount Store, Three Penny Mercantile).

Should you venture into real estate investing?

Not everyone is destined to become a real estate investor. Aside from putting in the time and effort necessary to learn the craft, you also need to assess your skills and personality if it aligns with what a good real estate investor should be. Here are six must-have qualities.

1. Good understanding of cash flow

   You need to be aware of all the expenses associated with the particular investment property you are targeting, such as property tax, insurance, HOA fees, and maintenance, to name a few. You must also know the ideal ranges for cash-on-cash returns, price-to-rent ratios, cap rates, and other financing aspects, to ensure you are earning from your investment.

2. Eye and ear on market conditions

   Keeping abreast of market behavior and trends not only helps you understand the ins and outs of financing an investment property more intricately, it also serves as a way to minimize your risks.

3. Effective communication

   A lot of real estate transactions will rely on how well you communicate with others. Active listening and tactfulness are essential traits for real estate investing success, especially if you plan to have tenants on your property.

4. Management

   Good organizational skills are an absolute essential for real estate investing success. There are a lot of aspects that an inventor must manage, including maintenance, payments, tenants, etc. Of course, you can pass on your management responsibilities to a property manager and bookkeeper so your investment will be less demanding of your time.

5. Vision

   You have to have a plan for your property. Whether it’s completing a commercial space, making a sale, or expansion, a vision will serve as your guide toward your investment’s future. By knowing the direction that your investment must take, you’ll be empowered to make better decisions that will help you realize your real estate goals.

6. Digital savvy

   The world is becoming increasingly reliant on digital technology. Negotiations, marketing, and even completion of legal documents – real estate investors can manage their investments better with the use of various apps and technologies. Take the time to learn these digital tools to simplify a lot of your tasks and responsibilities as an investor – and also potentially achieve success faster than you previously thought possible.

Know the risks of real estate investing

Common business sense dictates that the bigger the risks, the bigger the reward. Of course, the opposite is also true – there is the potential to incur great losses in high stakes real estate investing. Here are the biggest risks to consider when financing an investment property.

Need help financing an investment property in Ashland, Oregon?

Let Ashland Homes Real Estate Inc. help you select the right property in Ashland, Oregon to invest in. We can even help you secure local financing for your planned investment with the most trusted lenders in the city. Get in touch with the Ashland Homes Real Estate team today by calling 800.334.7499 or contacting us here.