Variables in the 50% formula...

[Ed L.]

I purchased a nice older home that is located on the same street as one of my current rental homes.

My original intentions were to flip the home and re invest the profits...

I'm confident it will sell, but I've also contemplated keeping it as a rental due to the location, and the fact that it would be a low maintenance home.. Brick/vinyl, new roof, New HVAC, New hot water, new appliances, new windows, solid surface floors.

I'll have $68,000+/- invested.

Rent will bring $1,000 monthly x 50%= 500

$68,000-----15% down payment-----4.5% interest rate-----20yr loan= $365 P&I

Cashflow of $135 monthly= 1,620 annual or 15% cash on cash return...

My question is... When using the 50% to evaluate properties should I be using a 15, 20, or 30yr mortgage???

If the 15yr mortgage is used the property is just cashflowing $50 per month.

20yr Cash flows $135.00

30yr = $200.00

Finding cash flow properties with a 30yr mortgage seems should be easy if my math is correct. 15 yrs gets to be a bit harder.