Looking for some advice on my first rental property. Property details:
Loan Amount - $324,000
Rent - $2900/Month
Revenue/yr after PITI - $7570
The current mortgage amount is $1466 and I am paying an extra $244 per month towards the principal. I am looking to continue investing in real estate and was looking for suggestions on if I should continue paying down the loan quicker or take advantage of the extra cash flow since my renters are paying down the loan? Any advice would be greatly appreciated.
Looking for some advice on my first rental property. Property details:
Loan Amount - $324,000
Rent - $2900/Month
Revenue/yr after PITI - $7570
The current mortgage amount is $1466 and I am paying an extra $244 per month towards the principal. I am looking to continue investing in real estate and was looking for suggestions on if I should continue paying down the loan quicker or take advantage of the extra cash flow since my renters are paying down the loan? Any advice would be greatly appreciated.
It absolutely depends on your near term and long terms FINANCIAL goals. If your want to have 3 properties paid off by the time you are 40, then work to get that done, if you want 25 properties cash flowing $200 per unit by the time you are fifty, then work towards that. You goals need to be based on income not doors or property count. Hope that helps!
Real Estate Investor · Lakewood, WA · Member since 2014 · 9 posts · 0 votes
6y
I would ensure that you have enough funds set aside for capital expenditures on the property before paying additional principle. If that is taken care of, I would be setting aside money for a potential future property opportunity. Good luck!
Danville. CA · Member since 2017 · 313 posts · 220 votes
6y
@Derek Hacker congrats on your first deal!
As others mentioned, depends on your goals. How much would your cash flow increase by not having a loan? How much cash flow can you generate if you put that money into another property instead of paying down one?
My vote would be to let the tenants pay down your loan and use the cash flow to buy OTHER properties, compounding is a beautiful thing at scale.