I get where you're coming from, but personally, I've found having extra liquidity to be a lifesaver more than once. When my HVAC went out unexpectedly last summer, having cash on hand meant I didn't have to scramble or dip into credit. Lower monthly payments are great, sure, but don't underestimate how quickly things can pile up if your reserves are thin. Guess it depends on your comfort level and how stable your other income streams are...
Totally see your point about liquidity—unexpected repairs can hit hard, especially when you're just starting out. I'm currently in the process of buying my first investment property, and I've been wrestling with this exact question. Initially, I was leaning toward putting down a bigger chunk to keep monthly payments lower, but after talking to some seasoned investors (and reading your HVAC story!), I'm reconsidering.
One thing I've learned is that investment properties have a sneaky way of surprising you. My buddy bought a duplex last year, and within two months he had plumbing issues in both units. He'd stretched himself thin on the down payment, thinking he'd save money long-term with lower interest rates. But when those plumbing bills rolled in, he ended up dipping into credit cards—exactly what he wanted to avoid.
On the flip side, higher interest rates do sting over time. I've run the numbers, and even a small bump in interest can add up significantly over the life of the loan. But I guess it comes down to balancing peace of mind with long-term savings. For me personally, having a comfortable emergency fund feels like a smarter move right now. I'd rather pay a bit more interest each month than lose sleep worrying about how I'll handle unexpected expenses.
Still figuring it out myself though... seems like there's no one-size-fits-all answer here.
You're definitely thinking about this the right way—liquidity is key, especially early on. I've seen clients regret tying up too much cash upfront. Maybe consider a moderate down payment and revisit refinancing options later if rates improve? Just a thought...
Good points overall, but I'm wondering if refinancing later is really as straightforward as it sounds? I've seen plenty of cases where investors banked on rates dropping, only to get stuck when the market didn't cooperate. Plus, refinancing isn't exactly free—closing costs and fees can add up pretty quickly, right?
I get the liquidity argument, totally valid, but isn't there also something to be said for locking in a lower rate upfront and having predictable monthly expenses? Especially if you're planning to hold onto the property long-term... Just thinking out loud here, but wouldn't a higher down payment also mean less interest paid over the life of the loan?
Curious if anyone's run the numbers recently—what's the actual break-even point between these two strategies with current rates?
Ran into this exact situation last year—thought I'd refi once rates cooled off, but here we are, still waiting. Closing costs definitely bit harder than expected. Have you considered opportunity cost too? Tying up more cash upfront could limit other investments. I did a quick spreadsheet recently, and for me, the break-even point was around 6-7 years. Might be worth crunching your own numbers to see where you land...
