First rental property with mortgage or no?

Question

Should I save up enough money to buy my first rental property or would getting a mortgage be a waist of time?

Matt Nusbaum · Answer

@Willie Lohse Get a mortgage if possible. Paying all cash will lower your returns and limit your ability to buy more properties.

Tim Herman · Answer

@Willie Lohse it is the tenants job to pay off the mortgage. Start to use your calculator and see the power of leverage. Abbreviated example. 1 paid off house $100000 or 5 houses with 20% down. 3% growth 1 house grows to $134000 or 5 houses grow to $670000 in 10 years. What about the mortgage. Mortgage paid down to $65073x5=$325365. Equity=$344365. Like the Capitol One commercial"What's in your wallet".

Willie Lohse · Answer

@Theresa thank you for reaching out.  I need to do more studying and reading.

Willie Lohse · Answer

@Danny Randazzo thank you for reaching out.  I need to do more studying and reading.

Willie Lohse · Answer

@Tim Herman thank you for reaching out. I need to do more reading and homework.

Theresa Harris · Answer

Your tenant will pay for your mortgage (and other costs), so it is not a waste of time to save up for a down payment and get a mortgage to buy  a rental.  Do your homework first and know what the numbers are as no tall houses are suitable for a profitable rental.

Danny Randazzo · Answer

@Willie Lohse it depends on the purchase price, type of property and area to see if a lender will provide a mortgage. In most place across the US you can get a mortgage from a local community bank to serve high population or rural populated areas. You also need to consider your goals for the investment and the type of return you'd want to have. In most cases having a mortgage will increase your return. Also, instead of buying one house with all of your cash, could you buy two or three if you got mortgages on them? Good luck.

First rental property with mortgage or no?

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