Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Wholesaling
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 8 years ago on . Most recent reply

User Stats

24
Posts
17
Votes
Matt Finneseth
  • Accountant
  • Fargo, ND
17
Votes |
24
Posts

Put cash flow towards principle?

Matt Finneseth
  • Accountant
  • Fargo, ND
Posted

This is something that I haven't seen yet as far as an investment strategy. I've thought about taking the cash flows from the rental and putting it towards the principle on the loan in order to expedite acquisition of equity as well as mitigate perhaps thousands of dollars in interest payments over the shortened term. Is this a sound practice, or is it not talked about because there is a better strategy? 

Most Popular Reply

User Stats

13,365
Posts
19,402
Votes
Joe Villeneuve
#4 All Forums Contributor
  • Plymouth, MI
19,402
Votes |
13,365
Posts
Joe Villeneuve
#4 All Forums Contributor
  • Plymouth, MI
Replied

The quick answer is "no".  You're an investor, not a property "babysitter".  What you propose defeats the purpose of buying a rental.

1)  You buy rentals for cash flow.  If you're going to give the money right back, why bother?

2)  Equity is a trophy on a rental.  What is it good for...nothin'.  You can't access it unless you sell it, or refi.

3)  Here's the big one.  You are not making the payments on the interest...the tenant is.

Loading replies...