Lower interest rates can increase your cash flow
Right now, interest rates for non-owner occupied, landlord loans (also known as rental property loans) are near record lows – meaning as a buy and hold investor in Houston (where our home office is located), Texas, or anywhere in the country, you’ll be paying less on your mortgage payments and putting more money in your pocket. Rates were as high as 18% for primary purchases during the 1980s, so today’s record lows can make a huge difference for real estate investors.
A common real estate investment strategy, buying and holding is the process of purchasing a property with the intention of holding it for an extended period of time. These properties are then leased to renters, generating monthly rental income. If a quality investment property has been chosen, its value could appreciate year after year, increasing the investor’s equity in the property. Buy and hold investing usually produces a steady stream of cash flow, which is money the investor receives on a regular basis (like monthly rental income) from their investment properties. Positive cash flow is the remaining cash after all expenses have been paid.