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Updated over 6 years ago on . Most recent reply

User Stats

48
Posts
34
Votes
Drew Ramasco
  • Rental Property Investor
  • Ocala, FL
34
Votes |
48
Posts

Need help understanding rental analysis

Drew Ramasco
  • Rental Property Investor
  • Ocala, FL
Posted

I need help analyzing a potential deal, I'm not quite sure why the rental calculator here shows such a dramatic difference in ROIs. 

For simplicity sake, let's say I'm purchasing a townhouse for 90k with zero down and no pmi. Potential rent is 1000/month.

When comparing loan options, the calculator says a 15 year loan at 4.75 percent would be a -182% cash on cash roi, while a 30 year loan with the same interest rate and same terms is a +94% cash on cash roi. 

Why such a huge difference when going from a 15 year to a 30 year? Everything else in the calculator is the same... Same rent, same insurance, same taxes... Only thing is length. What am I missing? 

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