All Forum Posts by: Johnnie Smith

I know there are several rule of thumbs to consider when looking at a potential investment such as the 50% rule, $200/door etc. 

I have a potential condo investment I am looking at but based on the rent I can get, the ROI runs in the range of 12-18%. The comps in the building are a 1BR/1 Bath w/ parking for $1750 where as the one I'm looking at is a 1BR + den / 1 Bath w/ parking so I assume I can get easily $1850, $2000 if I'm lucky (the 18% ROI).

Thanks for any input!

Thank you for all of the responses! They've all been helpful. 

I am quickly learning there are many ways to achieve your goals when it come to real estate investing, and I can admit it's been engrained in me from my parents that paying off the mortgage faster/quicker is the better option, hence when I am trying to educate myself on the alternative. 

Thanks again everyone!

@Joe Villeneuve  Valid points I agree with your rational in your example, but lets say you are a Buy and Hold investor and your goal is to build life long cash flow. You say most properties are refinanced 7-10 years down the road. Let's say you were that far into a 15 year mortgage, wouldn't it be logical to think, ok I only have 5 some years left of this mortgage to pay therefore I am mainly paying the principle at this point, I will stick out paying it til the end so I can own this property outright and then really benefit from the pure cash flow of having a rental property?

Hello all,

I would appreciate any insight / thoughts people have about this topic. 

I grew up with real estate being in my family. My parents currently own four investment properties in addition to the home they live in. Two of those investment properties they own clean and clear and are paying off their residence in 2016. 

That all being said, they took out 15 year mortgages for all of those which is contrary to the popular belief that you read here / almost any blog on the internet. I am sort of in a predicament because I too intend to buy my first investment property myself as I truly do enjoy the business myself and see the amazing benefits of passive income. 

I just can't seem to decide what would be better, the 30 or 15 year mortgage. I see the benefits of positive cash flow from day one as being a huge deal since that can create the snowball effect and thus enable me to purchase more properties faster. But seeing my parents sort of changes that perspective for me since it was almost like they sacrificed that negligible cash flow for a promising guaranteed return.

Real estate would be a side business as it is for my parents, and my strategy as for now is a buy and hold strategy, with the possibility of selling those properties when/if they were to appreciate and convert those earnings into better properties. 

What are all of your thoughts on this common debate?