Hello moostachians,
I know that if investment ROI > student loan interest, then invest. Is there a mathematical way to show this that takes into account the weight of the interest and balance of the student loan, and also the weight of the loan acquired for the investment?
Here's my situation...
$106,000 student loans @ 3.95% APR
$59,000 3/1 SFR
NOI = $7,107
20% down payment ($11,800), 30 year fixed $47,200@ 4.5%
Annual Debt Service = $2,870
Before Tax Cash Flows = $4,237
COC Return = 4,237/11,800 *(100) = 36%
Real estate has other benefits such as loan pay down and tax benefits that can swing the vote towards RE invest. But how can one mathematically show that 36% on $11,800 is more or less than ($106,000 @ 3.95% + $47,200 @ 4.5%) ?
Much appreciated!
