Over the past several years I have increased our rental property debt load with a type of debt that is unique. It is deferred (no payments, no interest) for 15 or 20 years. Obviously it is appealing but does come with strings attached. But you truly cannot make an argument to pay off these notes early. I just feel like I need to recognize that it is structured differently than other debt due to the absence of impact it has on cash-flow (no interest, no payments). Obviously good not to focus on paying off the standard debt first, but hope tracking them separately will create more motivation.
Thinking I may track that debt differently so that I can still track my progress towards paying off the "standard" rental debt and live off the cash flow stream from my investments. Want to understand how much is there and how much is needed to pay it off, how changes I make affect it, and how much time horizon is in front of me. Sooo...here goes.
Debt to assets = 55.71%
Total (standard + deferred) real estate debt to RE assets ($4,264,500) = 63.72%
Standard RE debt ($1,991,430) to RE assets = 46.70%
Deferred RE debt ($725,869) to RE assets = 17.02% |