30 year term loan vs 15 year term on investment properties

[Antonio Similia]

So I just wanted to discuss the pros and cons of a 30 year vs a 15 year conventional loan on an investment property. My first post to these forums as a new member to Bigger Pockets!

Quick background on my situation: I'm 28 years old married and bought my first property in 2012 when I was 22. I own 2 properties now both with my father 50/50 split on everything both loans in my name. A large Duplex 4 bedrooms each side purchased in 2012 (FHA loan 203k rehab) and refinanced in 2014 to a conventional 30 year. The other is a three family purchased in 2016 (FHA Loan). The three family has not been refinanced and still holds the original loan. Both properties take in a total (between the 5 apartments) $7250 in rent. The mortgages add up to $4131 leaving me a profit not including expenses of $3119 a month split 50/50. The Duplex has at least 200K in Equity or more from last appraisal. The three family has not had a recent appraisal but seems to have conservatively about 50K in equity in my market.

This is just the basics of my situation. I'm just looking to bounce off Ideas here from experienced investors and maybe investors that have had a similar situation about whether it would be smart to refinance both loans to a 15 year mortgage? I also am looking to increase my portfolio moving forward in life so I'm wondering if this would hinder my ability to do this, but it seems like refinancing and having both these properties paid off by the time I'm 43 or so would be pretty great! Plus my father who is 51 would have the added benefit of having these two properties paid off by the time he's in his mid 60's, probably about the time he will be retiring.

My Father is basically my "Private Investor" so to speak because he has cash and I have more time and energy to put into the ins and outs of finding deals and dealing with tenants. So finding more rental properties may benefit him and I once retired.

Anyway thanks for reading! Bigger pockets seems like a great place to get in touch with investors and I'm glad I found this resource.

[Wesley W.]

Arguments for a 30 year loan: 

(1) You lock in your fixed payment in "2018 dollars" for the next three decades, when that $700 will be worth a lot less (Jason Hartman calls it "inflation-induced debt destruction")

(2)  Since your payments are lower, you have increased cash flow that can be used to deploy capital into new projects

(3)  If unexpected expenses arise (personal or business), you have an immediate source of regular cash flow

Arguments for a 15 year loan:

(1) increased equity over a shorter time horizon

(2) cheaper interest rate

(3) owning property "free and clear" still in your prime years and the lifting of psychological burden of debt

It really depends on your personal strategy and where you want to place your risk.  I personally like the appeal of the 30 year note as those arguments better fit my business model.