Funding an investment property using a HELOC

[Ronald Stewart]

Is it worth opening a HELOC to fund a down payment on a short term vacation rental property? Is there a better way to fund a down payment for a first time REI?

[Greg Kasmer]

Ron - Yes, you can fund a down payment with a HELOC, but you'll want to ensure that the cash flow generated from the investment (In this case a vacation rental) can cover the cost of payments on the HELOC. You may also want to consider a Home Equity Loan (fixed rate) if you'd like to protect from future increase rate increases. Good Luck!