Montana might not be on everyone’s radar as a great state to invest in real estate, but it is known for its burgeoning market. According to Home Union, Montana has incredible scenery nowhere else in the country can find. Montana is home to many attractions and college towns. Prices have been climbing ever since 2015 as demand has increased significantly in the state. Tourism is a thriving industry, given reputable attractions like Glacier National Park and Yellowstone National Park.
Montana is a state with low property taxes and higher home values. Property taxes are very low in Montana, especially compared to the national average. Montana also has very low unemployment rates compared to the national average, and Montana has a growing job market in tech, with very high growth rates. Energy is also a growing job market, and Montana has a lot of jobs available due to the retirement of Baby Boomers and not enough people to replace them.
Given this labor shortage, more and more people have been moving to Montana, and the state is an under the radar place to invest in real estate.
Right now, Montana is a seller’s market. Prices are high and homes are selling very quickly. However, every city has different real estate trends, so it’s important to look specifically at each city. Bigger cities like Missoula and Billings are great places to invest in real estate. For the most part, however, demand is outpacing supply in Montana, and real estate investors might get into bidding wars over property in the state.
Hard money loans might be the best way to invest in real estate in Montana. Hard money loans are otherwise known as short-term bridge loans and last resort loans, but they have a huge advantage in seller’s markets: they can be approved extremely quickly. Hard money loans can be approved within a couple of days, instead of the month or more it can take for mortgage loans to be approved. Hard money loans give fast money to investors that can immediately make them competitive.
Hard money loans are approved so quickly because they’re based on the property. They’re not based on the financial standing of the applicant, like traditional mortgage loans. Instead, the rates and terms of hard money loans are determined by the after-repair value of the property. Hard money lenders use the property as collateral, which means if a borrower defaults on a hard money loan, the lender takes on the property, which is very different from foreclosure on a mortgage where the bank initiates judicial proceedings.
This means hard money loans come with significant risks. They have higher interest rates, lower LTV ratios, and shorter repayment periods than traditional loans. Hard money loans have a 8–15% interest rate on average, which is significantly higher than the interest rate of traditional mortgage loans. Hard money loans also have lower LTV ratios than traditional financing, which means borrowers have to put down higher down payments. Lastly, hard money loans have repayment periods of more or less a year, which is significantly shorter than the 15 to 30 year mortgages of traditional mortgage loans.
It’s important to trust only the best hard money lenders, who will give you the best rates and terms and not tack on extraneous fees. At Hard Money Lenders IO, we have done the work so you don’t have to. Here are the best hard money lenders in Montana.