bflathers
New Member
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Location: San Francisco
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| Property Investment II |
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thank you for the feedback on my earlier post, I have a new question:
My wife and I save about 35k/year after all expenses. We are about to buy and rent an investment single family property. I'm looking to get a 7year ARM loan, rent it for 3 years, then move in and live there for 2-3 years and then sell and upgrade. We will put 150k down and the loan should be for about 250k.
Provided the house is rented and rent is covering the ARM payments, should I be planning on paying down the morgage while it is rented with our 35k or so surplus savings each year, or should that money be invested elsewhere. We intend on keeping about 20k handy for emergencies.
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Mon Dec 06, 2004 9:27 pm |
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xboxundone
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Sounds like you and your wife have an awesome ooporunity.
Paying down would only come in handy if you actually plan on keeping the house longer than the 7 years otherwise I would say invest otherwise....
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Mon Dec 06, 2004 9:47 pm |
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BlankenshipFP
Money Talk Advisor
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I agree - especially if you have very favorable terms on your mortgage. You'll have adjustments during the term of your loan, so you should revisit the situation each time your rate changes. That is, consider the benefits of investing vs. prepayment vs. refi on your adjustment dates.
Hope this helps -
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
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Tue Dec 07, 2004 1:00 pm |
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TripleNetCentral.com
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Agree with the previous responses. Why tie up more equity than you need to. Real estate is all about leverage.
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Thu Feb 24, 2005 7:57 pm |
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bigp
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Why pour all af your money into this property if you plan on selling? Use your funds to acquire other properties! It is certainly all about Leverage!
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Thu May 19, 2005 6:54 am |
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