Background: My brother and I have 4 rental units currently. Unit 1 and Unit 2 are on a 15 year note and barely cash flow. Unit 2 is in an area that doesn't really fit with what we invest in and we are currently selling it (closing should be next week). The property will not appreciate much over time and my brother (the handy man of us) has moved an hour away, so we will start to look for properties where he is soon.
The selling of unit #2 has cause me to reconsider selling unit number 1.
How would you re-evaluate a property?
Would you run the numbers asking yourself would you buy it again right now?
How would you do it?
Thanks in advance for any advice or insight!
Have you evaluated what your property looks like if you refinance into a 30 year mortgage? You might decide it looks a lot better.
I know there are a lot of people out there that still want to pay down the mortgage as fast as possible, but since our money is no longer backed by gold and the Fed prints like a drunken sailor, it no longer makes any sense to pay down a mortgage. Long-term fixed-rate debt will make you much more wealthy. I recommend Robert Kiyosaki's latest book Why the Rich are Getting Richer. It does an excellent job covering how the wealthy use debt to make money.
And, even if you still like the idea of paying a mortgage off quickly, if you get a 30-year mortgage, you still can pay more than your payment if you choose, but you have the option to pay less when needed to maximize cash flow.