Leveraging house equity to increase investment cash flow
Posted on 2006-10-23
I have been thinking about buying residential property in order to rent it out to students. The issue, is that this rental property would not cash flow. The money that I would bring in would equal the money I spend on the mortgage and maintenance. However, I will still be getting equity on the principal of the loan that I am slowing paying off as well as appreciation of the property.
Assuming I purchase a half million dollar 5-plex that doesnt cash flow, how can I use this asset to increase my cash flow in another investment? What type of investments do any of you have positive experiences with that you would like to share? Does this make sense to take on a huge mortgage just for the sake of equity in the long term?