What is a better rental investment plan 15 or 30 yr loan?

Putting 20% down should I either get a 15yr loan or a 30 yr loan. The property would cost about 170K and would rent for conservatively 00 a month. Putting the #’s into the calculator below http://www.finance.cch.com/sohoApplets/MortgageRentvsBuy.asp

On the 30yr loan my value of investment goes into negative even though the rent would carry my mortgage costs. However, when I do the 15yr my value of investment is really high but, I would have to bleed a few hundred dollars each month. (which i can afford)

I preface this with I don’t really understand home equity loans but, at 24 I would like to maximize my money for the long-term in the best way possible.

One Response to What is a better rental investment plan 15 or 30 yr loan?

  1. Ron Berue
    August 19, 2010 at 10:08 pm

    You should get a 30 year loan, positive amortization, no pre-payment penalty, fixed rate mortgage.

    At the time you go to closing or settlement you ask for or its automatically given to you:
    an amortization schedule – tailor made specifically for your mortgage.

    Simply by taking the total monthly payment of principlal and interest THEN adding the following month’s principlal to that amount, you’ll save the interest on the second month.

    Paying the principal does not mean you can skip the next month.

    It means you’re saving the second month’s interest.

    When month 2 comes, you pay the same amount of principal and opayment for month 3 AND ADD the principal for month 4.

    Repeat this throughout the life of the loan. You’ll save THOUSANDS – tens of thousands of dollars.

    With EACH payment, you enclose a note:
    IDENTIFY THE PROPERTY: ADDRESS & LOAN NUMBER – AS WELL AS ALL BORROWERS.

    Then you simply type a small note. The body is the same. Only the dates and amounts change:
    Date: ____________, 2008

    To Whom It May Concern;

    Please be informed, enclosed is check no. ___ in the amount of $___. This payment represents
    this month, ____, 20___ principal & interest, as well as the principal payment fior next month, ____. 20____

    Please appl;y that additional amount to the balance of the mortgage.

    According to the amortization shedule, the balance on the loan is $____

    Very Truly Yours,

    Signed

    IF you have ANY Qs, speak with the loan officer. They may have the letter already prepared.

    Thanks for asking your Q! I enjoyed answering it!

    VTY,
    Ron Berue
    Yes, that is my real last name!

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