https://www.easy2invest.org??easy to invest is a portal showing you how is easy to invest, how to start to invest, how invest, how to make your money work for you.https://easy2invest.org/article/3623/is-it-good-to-buy-a-rental-with-7-interest-ratio<p><img src="https://ecode10-image.s3.us-west-2.amazonaws.com/646ff496-d9ee-4d7c-b5b9-427bf1b859d3buying-a-rental.jpg" alt="image" /></p> <p>A 7% interest rate on a rental property is not automatically good or bad. What matters is whether the property produces enough cash flow after all expenses.</p> <p>A simple way to evaluate it:</p> <h3>Example</h3> <ul> <li>Purchase price: $250,000</li> <li>Down payment: 20% ($50,000)</li> <li>Loan: $200,000</li> <li>Interest rate: 7%</li> <li>30-year mortgage</li> </ul> <p>The principal and interest payment would be about <strong>$1,330/month</strong>.</p> <p>Now add:</p> <ul> <li>Property taxes</li> <li>Insurance</li> <li>Maintenance</li> <li>Vacancy reserve</li> <li>Property management (if applicable)</li> </ul> <p>Your total monthly cost could easily reach <strong>$1,800-$2,100+ per month</strong>.</p> <p>If the property rents for:</p> <ul> <li><strong>$1,600/month</strong> ? likely negative cash flow</li> <li><strong>$2,200/month</strong> ? small positive cash flow</li> <li><strong>$2,800/month</strong> ? potentially strong cash flow</li> </ul> <h3>What investors typically look for</h3> <ol> <li><strong>Positive cash flow</strong> after all expenses.</li> <li><strong>Cap rate</strong> ideally higher than the mortgage rate.</li> <li><strong>Cash-on-cash return</strong> that beats alternatives such as REITs.</li> <li>Potential for rent growth and property appreciation.</li> </ol> <h3>Compare with REITs</h3> <p>Today, many REITs such as VNQ can provide real estate exposure without:</p> <ul> <li>Tenants</li> <li>Repairs</li> <li>Property taxes</li> <li>Large down payments</li> </ul> <p>If a rental at 7% interest barely breaks even, a REIT may offer a better risk-adjusted return and much less work.</p> <h3>My rule of thumb</h3> <p>A 7% mortgage can still be a good investment <strong>if the property generates positive cash flow from day one</strong>. If you're relying entirely on future appreciation to make the numbers work, I would be cautious.</p> REITsMonday, June 8, 2026https://easy2invest.org/article/3621/spacex-ipo<p><img src="https:/INVESTMENTSThursday, June 4, 2026https://easy2invest.org/article/3620/buy-a-reit-or-a-rental-which-one-is-better<p><img src="https:/REITsWednesday, June 3, 2026https://easy2invest.org/article/3619/why-a-highyield-savings-account-could-be-one-of-the-smartest-financial-moves-you-make<p><img src="https:/SAVINGSTuesday, June 2, 2026https://easy2invest.org/article/3618/why-dont-people-like-to-save-the-money-first<p><img src="https:/SAVINGSMonday, June 1, 2026https://easy2invest.org/article/3592/reits-pay-monthly-dividends<p><img src="https:/ETFsMonday, May 4, 2026https://easy2invest.org/article/3547/bond--vanguard-total-bond-market-etf-bnd-paying-almost-4-dividends<p><img src="https:/INVESTMENTSTuesday, March 31, 2026https://easy2invest.org/article/3535/the-best-etfs-for-2026<p><img src="https:/ETFsSaturday, March 21, 2026https://easy2invest.org/article/850/financas-para-os-filhos<p>        Ol? InterFINANCESSaturday, January 1, 2011https://easy2invest.org/article/852/financas-para-os-filhos<div><br /> </div> <FINANCESSaturday, January 1, 2011