Advice: First rental property, money strategy question
Hey everyone,
I've found a property, settled on price and received a quote for a loan: 3.5% 30yr. But I had some questions revolving around strategy and how to allocate money.
I can currently save $1K/month from my job salary, and I was wondering what your opinion is on the allocation of my savings plus the property cash flow (CF) - excluding the part of the property CF that will be going into a contingency fund. So here are the options I'm considering.
1) High CF as possible and save as much as possible for downpayment on next property. This would entail a 30yr loan allocating all property CF (except for money going towards contingency fund) and $1k/mo to savings
2) Lower property CF and put all saved money into reducing remaining principle. This would entail a 12yr loan (just enough property CF to put all of it towards my contingency fund), put all of my savings towards paying down the remaining principal. Goal here is that I'll be able to refinance the house much quicker and perhaps have enough money for the downpayment of two houses.
3) Somewhere in between
I'm very interested to read about your take on this. This is my first property I will buy, so I'm very new, very green and you opinion and/or advice is greatly appreciated. Thank you!