Anyone put 50% down?

2 Replies

This question is for the conservative investors out there.

Some people put 25% down, others like the houses paid off. Anyone doing the in between?

I want to hold the mortgage so the tenants pay it down, however I want more monthly cash flow and some buffer for unforeseen events / down turns in the market.

Anyone putting down 50% on a 30-year fixed?

Equity decrease the cash flow on a income property. If you have cash you do not need put it in a REIT or income fund to gain maximum return not in a property.  Maximum return is gained through leverage, minimum return when parking cash as dead equity. The more equity you leave dead in a property the less the return on the property to the point it becomes a liability rather than a asset. 

What you do depends on your goals. If you have plenty of cash and do not wish to grow simply park it in a property and forget about it. Assuming you have more money than you will ever need or have a use for.

25% down is too much in my opinion. I prefer 100% leverage

I don't see 50% equity being a buffer for anything. Having 25% down and 25% cash reserve would be a better buffer for unforeseen events. Also it is cash so you don't need the extra cash flow :-)

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