We bought this house in 2008. After closing costs, etc we were into the house for right around 180000. It was right toward the end of the market crash so we were able to lock in a rate of 4.25%. In 2015, we refinancing the loan into a 15 year fixed term at 3.25. While this increased our monthly PITI payment, and we are taking a small monthly loss on the rent, the home will be paid off in a maximum of 15 years. At the same time, our tenants renewed and signed a 5-year lease and they negotiated a rent reduction to 1150 per month from 1405 per month. That was consistent with an overall drop in rents.
Financial Breakdown
Monthly PITI: 1078**
Property Management: 0
HOA: 94
Maintenance: (56.5) 5%
Vacancy (56.5) 5% ( of note, this house has never been vacant…)
Monthly Rent: 1150
Cash Flow: -135
**I made a calculated decision to change this into a 15 year loan to force a much quicker pay down. If I had to do it again, I would have left the payment at a 30 year rate and just paid the principal difference myself to equate to the 15 year interest rate pay down. This would have allowed me some more flexibility and cash flow if I needed it.**
The home is just 20 minutes from Broadway at the Beach and 12 minutes from the beach in North Myrtle Beach. We have had the same tenants in place for seven years without a vacancy.
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