I still wouldn’t pay retail price even at the bottom off the market, which is still essentially a best guess…there are great discounts to be had if you know how to find them. But I suspect you are right in that regard, I don’t think DC metro is going down much further. Good luck!
Everybody here reccomends buying something rather than paying off your mortgage: and that advice is generally right.
If that is the best deal you can find, then you are better off paying off your current mortgage w/ the money.
If you pay 1650 a month in mortgage and get 1850 in rent, you will be losing money, not gaining money. What about, taxes, insurance, repairs, vacancies.
Bottom line: Find a property that will make you money.
If you can’t do that, invest in something else.
I thought I 'll gain some money if I can rent a property for $1850 a month and pay $1650 for mortgage (this number includes tax, insurance already)
$1850 - $1650 - $200 (in gain monthly)
$500 off my principal monthly from mortgage
$500 + $200 = $700 a month x 12 = $8,400 a year in gain
Plus, I can claim something on tax.
And, the house price may increase every year.
This is what I think. Am I wrong?
Thanks for reading.
Are you taking potential repairs, vacancies, etc. into consideration? That $8400 projected gain can dwindle quickly
What kind of mortgage pays $500 off principal in the first month?
Have you looked at an amortization chart on this property?
Remember, you can’t eat principal. When the gas furnace on that rental goes out, it will come from your pocket.
We are not trying to kill your deal, just make you think as you answer the questions. It’s how we all got started. We’re trying to help you evaluate the whole deal.
Furnishedowner
The idea is to use other people’s money to acquire your investments.
Why not use a 30 year fixed rate mortgage that will be fully paid by your tenants? As long as you are getting a positive cash flow, is it that important that you have the mortgage paid off in 15 years if it means your property is a negative cash flow all that time?
Instead of using your money to pay off a mortgage in 15 years, why not use your money to invest in a second or third investment property?
I like this phrase.
I learned a lot from this quote.
Thanks very much!
I wouldn’t recommend paying off your mortgage. I’d suggest using the money to invest into other properties that produce income or more cash (like rentals or a fix and flip). If you pay off your mortgage, yes you may sleep better at night knowing your house is paid for, but that’s all you get for the time being. Why not use that money to make more money by investing into things that generate money? Your home doesn’t generate money.
Hope this helps!
New idea for me. Woh, I like it.
I will study for a RE license before doing this. In VA, they charge 6% to sell the house so if I have a re license, then I only pay maybe 4% only.
Good idea.
Thanks.