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Paying off mortgage faster when you have multiple properties...
Posted on 7/2/15 at 5:27 am
Posted on 7/2/15 at 5:27 am
Just bought a new home in Oxford, MS for $150k. This is a long-term house for me. My first house, was bought for $37k on foreclosure. I am renting it out this year for $800 month on a $450 mortgage. The APR on this home is 3.875%.
Now, I know that the common answer on fast-pacing a home purchase is to not divulge in it because I can likely get better returns investing it. However, playing the math game, does this change when one becomes a rental property only? If I did this long term, I feel like I could generate a larger profit-margin by paying the rental off quickly and then just clearing profit for years to come.
What say you? Let me know if additional details need to be added.
Now, I know that the common answer on fast-pacing a home purchase is to not divulge in it because I can likely get better returns investing it. However, playing the math game, does this change when one becomes a rental property only? If I did this long term, I feel like I could generate a larger profit-margin by paying the rental off quickly and then just clearing profit for years to come.
What say you? Let me know if additional details need to be added.
Posted on 7/2/15 at 7:16 am to rpg37
The only thing that matters is the interest rate. If you live in it for more than 14 days then you can deduct interest from your taxes, otherwise you can't. But other than that the rate is what counts here.
A guaranteed 3.875% return isn't terrible by any means although IMHO it's slightly conservative.
A guaranteed 3.875% return isn't terrible by any means although IMHO it's slightly conservative.
Posted on 7/2/15 at 8:29 am to rpg37
quote:
was bought for $37k on foreclosure. I am renting it out this year for $800 month on a $450 mortgage.
Is this a student housing type house or a regular rental? You may want to put your extra money into a reserve account, especially if there is a high possibility the house won't stay rented a majority of the time. If it is student housing it could possibly stay vacant for six months or a year if you don't rent it out in time.
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