Not exact matches
Say if you were to rent out the investment property for $ 2,500 per month, you could generate a net profit of almost $ 1,000 per month plus the average of 7 % annual
appreciation in property value
over the life of the
loan.
I like cash flow because when it increases then I increase my monthly payment on the
loan, which decreases the amount of interest I'll pay
over the life of the
loan, and of course shortens the
loan, which all increase my equity regardless of
appreciation.
Or if you know people already in a VA
loan take
over their
loan when they PCS and give them a small cut of the rent, they would in effect be your partner on paper, but you'd get the vast majority and any
appreciation plus you'd be using their VA benefit.
As you pay down the principal part of your
loan, you are building equity
over time in addition to any market
appreciation on your property.
You keep the beginning equity (resulting from the low - ball appraisal) and all of the future
appreciation and principal pay - down
over the term, if any (i.e., if your
loan is not interest - only).
However, they make much of their profit
over an extended period of time from rental payments,
appreciation of the property, equity gains from paying down the
loan with the tenant's money, and tax write - offs.