How do you determine if a 10 / 15 / 30 year loan is best

[Eric T.]

Hello, I'm new here, a little bit about myself; I currently have 2 investment properties (town homes) and I'm considering to expand my portfolio.  I have a little knowledge about investing in real estate as thats what my mom does, but she does it for fun, not a have to kinda thing, so she does deals based on her experience.  I want to see the other side of the picture with data and facts to see if I'm doing it right or wrong.

How do you determine how long you want a loan for? Obviously 30 year would give the best cash flow, but you're also paying a lot of interest to the bank. I have been reading a few of the sticky about COC, NOI and some other stuff to calculate how to determine what a good deal is, but it seems like that what i figured would be a good deal, a majority of people do not feel the same. I feel like a big part of that equation is the years financed into the loan, seems like a majority of investors are doing 30 year loan so bring down the mortgage and to bring up the cash flow; the problem with this is that obviously you're paying more interest to the bank also in this process. So what makes it better to have mortgage it at a 10 year vs a 30 year?

The way I was taught was, if possible always do 10 year loan instead of 30, that way you can have more cash flow sooner and you save interest and currently thats how both of my properties are structured.  The rent does not cover the cost of the mortgage, but the beauty of it is that in 10 years, it'll be paid off.  

I would like to present this example to see if anyone can tell me if i did this correctly or if 30 year would have been a better option.  

I purchased a town home this past year, the purchase price was $235,000, I put a 25% down. The mortgage on it is $1895 (10 year note) and the HOA is $285. So the total cost monthly is $2180, I currently rent it out for $1600, I pay the difference out of pocket every month. The way i see it is, in 10 years, i will hopefully be sitting on $235,000 (assuming it does not depreciate) and have a monthly income of $1300 after i pay the HOA. Now if I did the mortgage at 30 years, I'm sure i would not have to pay out of pocket every month, but it will then take me 30 years to have it paid off and to get any kind of actual income monthly. I understand that if i mortgaged it out 30 years, i would also be able to invest is more properties as I would not have to reimburse the mortgage myself.

I would greatly appreciate any comments, either positive or negative, i'm just trying to gain more insight into this.

thank you for taking your time to read this