Like most things, rates are not created equal and as such the answer to this question largely will depend on your intentions with a particular property. For example, will this be a buy/hold or shorter investment? Is it going to be used for a long-term renter or as a short-term rental? But the overall answer to the ever popular ‘so what’s the rate’ question is the rate is probably not as critically important as it’s generally made out to be.
Allow me to explain.
First and very important, I am NOT implying that the interest rate you secure isn’t important, but there are wide ranging degrees of importance related to rate. For a 2-3 yr hold with a long-term renter the rate you lock will be far more important than say a 10 yr hold being used for short term vacation rental income. *You should consider having both of those investment types in your portfolio. Equally important, is to take the psychology out of it.
Run the numbers, do the math.
So many people I talk to you are shocked when they look at a payment difference between say a 6.0 to 6.5% interest rate on a $120,000 mortgage is only $39 a month different. The bottom line is that this is an investment; a kind of living breathing thing which is not one dimensional. You need to factor in all the implications:
- Pros/Cons
- Gains/Losses
- Annual appreciation (property and rents!)
- Tax savings
- Cash flow
- Exchange/Capitalization gains
- Vacancy
- Maintenance, etc
All of these when coupled with your qualifications and goals before you can truly understand how ‘important’ or perhaps inconsequential the interest really is on a per purchase or refi basis.
Call us today at 855-747-4343 or email us at info@RidgeLendingGroup.com and we’ll look at the scenarios together!
Once again, we thoroughly appreciate your patronage, and we continue to work very hard to keep exceeding the expectations of our clients. Thank you for choosing RLG!
