Buying a House to Rent Out

[Cullen Duplantis]

If I were to buy a house to rent out and mortgaged the house. Which would be a better route 15 or 30 year fixed mortgage.

[Julee Felsman]

Hi @Cullen Duplantis!

Depends on your goals. A 15 year loan will have a lower rate but a higher payment, which will make your cash flow worse. Paying the loan down more aggressively with a lower rate will save you lots of interest in the long run -- perhaps at the expense of growing your net worth with leverage.

And a 30 year loan will be at a higher rate, lower payment, better cash flow and more leverage for wealth-building.

Cheers!

Julee