Should I stick with 15-year note or find something longer?
We live in a small town and are looking at purchasing our first rental property in a neighboring town with population 7K. We are looking at lower cost properties as they seem to rent easier in this community. The property 2-bedroom/2-bath listed for $34K and has a renter who has been in it for more than 5-years paying $500/mo plus utilities. Being from a small town I have a great relationship with my local bank and will have no problem getting a loan for the property. The problem is my bank will not do a note larger than 15-years, which increases the monthly payment ultimately affecting the cash flow by about $83/month. On the 15-year note we would cash flow between $50-$75 depending on final insurance numbers, but on a 30-year not we would cash flow $130-$150+.
I have two questions:
1. Am I thinking to deeply about this? Is $75 cash flow on a 15-year note as good as $100+ on a 30-year note?
2. Many of the lenders we contacted will not do a loan for less than $50K. I am wondering if anyone has any ideas on lenders for a longer term for smaller loan amounts?
Thanks for any responses
Chad