SFH Rental - 30 year vs 15 year

[Kevin Young]

I'm trying to decide on a 30 year loan vs a 15 year loan. Purchase price for the home is $150,000. Rent is going to be $1450 a month. The big difference is the rate. Does anyone have any thoughts on this?

30 year

25% down = $37,500

Rate = 4.75%

Monthly payment - $897

Cash to close - $39,000

15 year 

25% - $37,500

Rate = 4.125%

Monthly payment - $1149

Cash to closse - $39,000

[Andy Webb]

Maximize your cash flow and do the 30-year.  Of course, I say that because my goal is to create cash flow and not get to a paid-off house.  When the equity gets high enough, re-leverage, lower the cash flow as a result, but get more assets with the resulting cash in hand...assets that are also pulling in cash.  What is your goal?