Mortgage Terms for Short Term Rental Properties

[Michael Gough]

I own one short term rental property.  I put down 10% and mortgaged the rest over 15 years at 2.875%.  If I went with a longer term, like 30 years, that would lower my payment, thus making my property cash flow positive.  Right now it hovers around breakeven.

So my question is, is it better to put down less and use a 30 year term? This will create a much higher overall cost to purchase with 30 years of interest, but it will provide monthly cash flow that I could use toward a 2nd short term rental property. What is the best way to leverage my money? Will it mathematically be better to own multiple properties with 30 years terms and pay much more interest or shorter terms with less properties? Are there any calculators out there to plug in these factors and see an actual spreadsheet of projected ROI? Thank you.

Michael