Financing Real Estate: Understanding Your Options
September 30, 2026
Financing real estate is rarely one-size-fits-all.
Whether you’re purchasing your first rental property, adding to an existing portfolio, renovating an asset or looking for flexibility without selling other investments, there are several ways to access capital. The right fit depends on what you’re financing, what assets you already own, how long you expect to need the funds and the level of risk you’re comfortable taking on.
Here are four financing options worth understanding.
Traditional Mortgages
For most real estate purchases, a mortgage is the most familiar place to start. The property secures the loan, while the interest rate, down payment, loan term and other requirements determine the overall cost of borrowing.
Investors may also consider refinancing an existing mortgage as their needs or market conditions change. Refinancing can alter the rate or terms of a loan and, in some cases, provide access to equity already built in the property. The numbers still have to work after accounting for closing costs and the new loan structure.
Home Equity Lines of Credit
A home equity line of credit, or HELOC, allows a homeowner to borrow against available equity in a property.
Unlike a traditional loan funded in one lump sum, a HELOC generally provides a revolving line of credit that can be accessed as needed. That flexibility can be useful when expenses happen in stages, such as during a renovation. Because the property serves as collateral and rates are often variable, both repayment and changing borrowing costs deserve consideration.
Securities-Based Lines of Credit
Real estate isn’t the only asset that may provide access to capital.
A securities-based line of credit, or SBLOC, allows eligible investments to serve as collateral for a line of credit without requiring those investments to be sold first. That can preserve liquidity within an investment portfolio, but it introduces another consideration: if the value of the pledged securities declines significantly, additional collateral or repayment may be required.
Unlike margin borrowing, proceeds from an SBLOC generally cannot be used to purchase or trade securities.
Margin Loans
Margin loans also involve borrowing against securities held in an investment account, but they operate differently from an SBLOC and can carry substantial market risk.
Because the underlying investments secure the debt, a decline in their value can trigger additional requirements or the sale of securities. That makes understanding both the borrowing terms and potential downside especially important.
Financing Real Estate Is Part of the Investment Decision
Interest rates matter, but they aren’t the only number worth watching.
The cost of capital, expected return, available liquidity, collateral, timeline and risk all play a role in determining whether a financing strategy makes sense.
Sometimes the most useful question isn’t simply, “Can I borrow the money?”
It’s “What am I asking this money to accomplish?”
Understanding the available options can help investors ask better questions, compare the trade offs and consider financing as part of the investment decision, not simply as a way to fund it.
This article is for general informational purposes only and should not be considered financial, tax, legal or investment advice.
Want to continue the discussion? Connect with our team today!