Perhaps you may have missed it, but the recent credit crisis is still having an effect on a large part of the financial system, making obtaining loans for investment property rather difficult to come by. No matter the spin being pumped out by the media, there are still problems to overcome before it will be possible to easily obtain investment property loans.

While there are considerable constraints on the amount of lending available, plus onerous terms for those wishing to borrow, for those with a real need for investing in property, there are still opportunities around, at least for those with cash. No more will the banks lend substantial amounts without first doing their due diligence as has happened over the last 10 years or so. Even the luxury real estate area of the market is under pressure since the so-called “super loans,” vanished.

The first thing to decide, when considering investing in real estate is to go either the residential or industrial route. While it is, of course, possible to become involved in both it can often be best to start out with just one as the needs and requirements are different. Certainly the virgin investor needs to pay special attention to the differences in loan structures and time frames.

Residential loans are obviously available only against houses that are built for residential purposes. Generally, leases usually run for shorter periods than non-residential property leases - less than 12 months is normal and they are renewed yearly. industrial leases tend to be longer - with perhaps as long as 25 years and almost never less than 5 - a recession notwithstanding.

The industrial property sector tends to attract longer leases than residential real estate because of the increased complexity and legal costs involved. An agreement between 2 business entities is necessarily more complex than between private individuals. Regardless - the ongoing credit crisis has made it all but impossible to arrange financing in this area of the market and the banks are only lending to their preferred clientele. Consider approaching non-traditional sources for funding instead.