Been looking into getting a rental property lately, and I'm kinda stuck between two mortgage options—fixed rate or adjustable rate. Fixed seems safer, you know, predictable payments every month, no surprises. But adjustable rates start lower, which means more cash flow early on, and that could really help with repairs or vacancies.
My uncle swears by fixed rates, says he sleeps better at night knowing exactly what he's paying. But my buddy went adjustable and he's been doing pretty well so far—though I guess he's only had it a couple years, so maybe he hasn't hit the scary part yet, lol.
Honestly, I'm leaning toward fixed just because I'm a worrier and don't wanna stress about rates jumping up randomly. But then again, the adjustable rate could save me money upfront, especially if I decide to sell in a few years.
Curious what others here prefer and why.
"Honestly, I'm leaning toward fixed just because I'm a worrier and don't wanna stress about rates jumping up randomly."
Same here—I went fixed for my first place last year. Adjustable looked tempting, but knowing exactly what's due each month made budgeting way easier, especially when unexpected repairs popped up (and they definitely did...).
I totally get the appeal of adjustable rates, especially when the initial rate is lower, but as someone who's refinanced twice now, fixed has always felt safer to me. Here's how I see it: first, think about your comfort zone—if you stress easily about financial uncertainty (like me), then fixed is probably your best bet. Second, consider your long-term plans; if you're planning to hold onto the property for more than five years, fixed rates usually make more sense because you won't have to worry about sudden hikes down the road. Lastly, factor in unexpected costs—trust me, they always pop up. Last year my HVAC decided to quit mid-summer... not fun and definitely not cheap. Knowing exactly what my mortgage payment was each month made handling that surprise expense a lot less stressful. Adjustable can work for some folks who are confident they'll sell or refinance again soon, but for cautious types like us, fixed just seems to offer more peace of mind.
I've always leaned toward fixed myself, but one thing I've wondered about adjustable rates—have any landlords here actually benefited significantly from choosing adjustable and refinancing quickly? Curious if it really pays off in practice or just sounds good on paper...
I've done both fixed and adjustable over the years, and each has its place. Fixed-rate is straightforward—it's predictable, stable, and stress-free. Good if you're risk-averse or planning to hold long-term. Adjustable rates are tempting because of the lower initial payments, but you've gotta have a clear exit or refinance strategy in mind.
To answer the earlier question about refinancing quickly: yes, I've benefited from ARMs by getting in at a low rate, using the extra cash flow to cover initial expenses or improvements, then refinancing to fixed once the property stabilized and equity built up. But timing is everything. If rates spike before you're ready to refinance, you could get stuck paying more than you budgeted for.
If you're leaning toward fixed because uncertainty stresses you out, honestly just stick with fixed. Rental properties have enough headaches without worrying about interest rate hikes every year or two.
