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Author Topic: Renting an Apt whose mortgage is paid off  (Read 3843 times)

Offline SurferDaze

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Renting an Apt whose mortgage is paid off
« on: March 10, 2004, 04:02:45 pm »
Hi,
  I recently acquired an apt and the mortgage is completely paid off.  I have a tenant in there now, however, after taxes and repairs i will only make $1,000 in profits for the year, even though I have no mortage payments.  
  Would it be more profitable for me to refinance so that I could apply some of the rent to paying off a new mortgage so i could be earn some equity in the property or would it come out the same?  Would my taxes also be lower if i had a mortgage since I could subtract my mortgage interest from my net operating income?
  Thanks so much!  I read your site every day!

-Kyle

Offline tedjr

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Re:Renting an Apt whose mortgage is paid off
« Reply #1 on: March 10, 2004, 05:42:16 pm »
I would borrow all that I could while rates are low. My granddad compained about 6% interest. Never so low that I know.  Buy another building or ten with the loan proceeds that are tax free for now at least. Leverage and appreciation are your friends in an up market but will do you under faster in a down market. Buy right and make even more profits.

Taxes would be lower but so would your income. Do not borrow money just to save on taxes.

If you are near retirement you probably would not take the above advice otherwise go for it.


Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas  78737
512-301-9171 home
512-587-6177 mobile
Ted P. Stokely Jr

San Antonio, Texas

Offline David Alexander

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Re:Renting an Apt whose mortgage is paid off
« Reply #2 on: March 10, 2004, 06:56:15 pm »
When You say apartment.... I'm guessing you mean condo, townhouse or something.... similar...

So that means you have a cashflow.... of $83.33

That would support a loan of only a little over $10,000 @ 7% for 240 months...

What is the Apt. - Unit worth....   ??

Sounds like I'd sell it... or keep it for cashflow only....

At least until you have a solid plan on how to use the 10k...

David Alexander

 




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