The second that vacationing in the property enters your mind, your cash flow decreases.

. - Are there any decreased value on these properties due to the ongoing HOA fees even after paying off the loan?

.- Are there any decreased value on these properties due to the ongoing HOA fees even after paying off the loan?

My wife and I are Realtors and real estate investors, and have helped clients employ this strategy to either significantly decrease their housing cost or eliminate it completely by having others pay for the mortgage. 

Having the extra $150/mo without PMI is massive  Your rate isn’t bad, and though you didn’t list the interest paid last year, it will be less this year and the decreased interest will accelerate as you go through the loan term. 

If we reduce leverage we may get lower cash returns however we do increase our ability to 'stay in the game' and not be forced sellers should rental rates decrease or vacancies rise.

I personally would rather have a garage than additional square footage and in a lot of markets where additional square footage is cheap garage conversion may decrease value. 

Making sure things rent easy to long-term tenants and at least break-even during a downtime when travel might decrease to cover downside there.  

With the above factors, the vacancy rate will start creeping up from the historical lows of 1% which will cause rental rates to flatten or begin to decrease, which in turn should translate to a cooling of purchase prices. 

So unless the property is 100% turn key ready to rent and the Seller pays all of your closing costs, you must factor in the total capital to get the property online and ready to rent, otherwise your numbers will be incorrect.Now, knowing what we know about what cap rate is supposed to measure, you can see why as the amount of capital goes up or the return goes down, the rate itself decreases.