Rental Property Investor · Brooklyn, NY · Member since 2016 · 28 posts · 2 votes
I'm extremely new to this, please forgive me for my lack of knowledge and for starting a (possibly unnecessary) new thread.
When investing/purchasing, doesn't the interest require you to end up paying a lot more then its actually value? Sometimes even double what it's actually being sold for? So how can you actually make money off this?
Again, apologies for my lack of knowledge. A detailed answer would be much appreciated?
Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
9y
Yes you pay more in interest over the course of the loan than the house is actually worth. This can be done by collecting more in rent than you pay in interest. This is a simplified version of this answer, but you make money by the difference of what you pay in interest (as well as other expenses) and what you make from rent. If your rent covers your expenses you can be in good shape. If it doesn't, you're in trouble.