Mortgages are classified based on duration and term. Term refers to whether the interest rate is adjustible or fixed. If it's fixed, that means that for whatever time period, the duration of the loan, you agree on one intrest rate. Adjustable terms mean that at a certain period of time, as agreed upon by the bank, the bank can change the interest rate to adjust to whatever is happening in the market. And so those are the three classifications of real estate loans.
#373: How do people make money in real estate?
Many focus on rental income, but this is only one of five ways that properties create wealth.
We explain five surprising ways that real estate builds your balance sheet: cash flow, appreciation (market-based and forced), tax benefits, principal paydown, and instant equity at closing.
Why does this matter for long-distance investors?
If you’re investing out-of-state, you’ll need to choose a city or town. How do you decide? First, think about how you want to bias your returns. Do you want to optimize for cash flow? More appreciation potential? Identifying this will help you align your city/town selection with your financial goals.
If you’ve been thinking about investing in real estate – especially if you might invest long-distance – you’ll love this episode.
Enjoy!
For more information, visit the show notes at https://affordanything.com/episode373
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