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Real estate investors are always looking for smart ways to leverage their property equity. One of the most flexible financing options available is the Home Equity Line of Credit (HELOC). While HELOCs are typically associated with primary residences, many investors wonder if they can tap into the equity of their rental properties. The good news? Yes, you can—but it’s a bit more complicated than a standard HELOC on a primary residence. Here’s what you need to know.
A HELOC is a revolving line of credit secured by the equity in a property. Unlike a traditional mortgage, which gives you a lump sum, a HELOC allows you to borrow, repay, and borrow again, similar to a credit card. This makes it an excellent option for real estate investors who need quick access to capital for repairs, upgrades, or even new property purchases.
However, getting a HELOC on a rental property is more challenging than on a primary home. Here’s why:
To qualify for a HELOC on a rental property, you’ll typically need to meet the following criteria:
Not all lenders offer HELOCs on rental properties, and those that do often have strict requirements. When comparing options, consider:
For a streamlined digital HELOC experience, consider modern lenders like Figure, known for fast approvals and competitive rates on investor-focused HELOCs. You can learn more about Figure’s HELOC options here.
A HELOC can be a powerful tool for scaling your real estate portfolio, but it’s not without its risks. Make sure your rental property cash flows reliably and you have a clear plan for how you’ll use the funds before committing.
Ready to take the next step? Get matched with a lender to explore your HELOC options today.
Yes, a HELOC can provide the down payment or full purchase price for another investment property if you have enough equity.
Possibly, if the funds are used for investment purposes, but always check with a tax advisor
It’s possible, but more challenging. Some lenders may require personal guarantees or additional paperwork.
If your property value declines, your lender may freeze your HELOC or reduce the available credit limit.
Looking for more financing options? Check out our guide to Real Estate Investor Financing.
This article is for educational purposes only and does not constitute financial, legal, or investment advice. Mortgage rates, terms, and requirements vary by lender and individual circumstances. Always consult with qualified, licensed mortgage professionals before making financial decisions. REInvestorGuide.com may receive compensation from featured lenders and service providers.
Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.