Question about mortgage paydown strategy for my first RE investment
I am about to purchase a SFH that cash flows just a bit with 35%-40% down.
Moving forward, I am deliberating between 2 strategies regarding paying down the mortgage (6.85%) and would love to hear more experienced people's opinions.
My long-term strategy is to purchase this SFH for a long-term rental, build equity, wait till interest rates go down, rinse and repeat.
STRATEGY 1
My monthly income allows me to pay a healthy chunk every month toward my mortgage, pay it off within 18-24 months and have more equity in the home once I decide to refinance
STRATEGY 2
Just let the rental income cover the mortgage payments over a much longer period of time
Eager to hear y'all thoughts.
Most Popular Reply
#5 All Forums Contributor
- Plymouth, MI
2...always. All you're doing with the first one is paying FOR your equity...not gaining anything. Your tenant is already doing that for free.
However, if you need to put 35% down to get a minimum CF, you're buying a bad deal to begin with.