Like any other debt, it will depend on your time horizon and the rates available. As a though experiment:

-You have $100k

-You can buy 1 house that rents for $1000/mo, for cash.

-Alternately you can buy 10 houses with 10% down, that are otherwise identical.

-Overhead, house prices, and rents will stay constant forever.

With 1 house, assuming 50% of gross rent goes to overhead, you're making $6k/year.

With 10 houses, assuming a 4%/30 year loan, you are making about $70/mo/house, so $700/month or $8.4k/year.

Now, that's a ridiculously simplified and extreme (no debt at all vs TONS of debt) scenario and you might not be able to get 4%/30 year loans with 10% down, but it's just intended to be illustrative of the positive effects of leverage - the 1 house/no debt is NEVER going to beat the 10 houses, even with all that debt you've piled up. The negative, of course, is that if something goes horribly wrong and you need cash, and the houses have lost value, you may be f'd. Leverage can bite you there just like it can in any other financial transaction.

Regarding the amortization period - most investors are going to want cash flow up front, because (thanks to our buddy leverage) that cash can be used to buy MORE properties. If you used 15 year loans for your 10 houses (assume, say, 3% for the rate - that's pretty close to the usual spread) you are losing $121/mo/house - so in 15 years, yeah, you own the homes free and clear - but you spent $15,600/year to do it. Over 15 years, that's $220k. So for your $320k total out of pocket, you get $5000/month cashflow in 15 years, not counting opportunity costs and such. That *might* be preferable to you than up front cash flow (which can be reinvested) but it depends on your time horizon.

-W