5.1% a good interest rate for rental property?

[Rico See]

I am looking to purchase rentals in the Memphis area .  I have been quoted a 5.1% mortgage rate. Are Mortgage rates higher for rental property?

[David Hutson]

Rental loans are generally a half a percent higher to maybe one percent higher.  It's due to the higher risk level for the banks.  5.1% sounds ok for a 30 year loan but I would check local credit unions and banks where you live and where you want to invest.  If you have good credit and a good job I would think you'd find a rate under 5%.

Depending on whether you are trying to get cash flow or trying to pay off loans quick, you may want to look at a 15 year loan.  You can save a lot of money but if you need/want the cash flow do a 30 year loan and let the tenant pay it off over time.