Loan to Value Ratio (LTV)
Calculation: LTV Ratio = Mortgage Amount / Appraised Property Value
Ideal ratio: typically, 80% or lower LTV ratios will help you to obtain the most favorable / lowest rates
What is the Definition & Importance of ยดLoan to Value Ratioยด:
When investing it is obviously favourable to accrue as little additional cost as possible while minimizing the amount of down payment on your loan to ensure you have plenty of cash on hand to manage your business and investments.ย
This metric helps to calculate exactly that. Ideally, our hotel management company suggests you put down as little as possible at the best interest rate possible. Typically, the best rates can be secured at an LTV ratio of 80% or lower.
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About the Author:
As CEO and Founder of XOTELS, Patrick Landman has made it his mission to turn hotels and resorts into local market leaders. XOTELSยด diverse expertise and deep-knowledge across revenue management consulting, hotel management, and hotel consulting, enables us to drive results for independent boutique hotels, luxury resorts, and innovative lodging concepts. Below you will find opinion articles written by Patrick Landman.