CalculateRealEstateROI

Cash Flow

Should I prioritize cash flow or principal paydown?

Cash flow now, principal paydown later. Both matter — but cash flow funds survival.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Cash flow now, principal paydown later. Both matter — but cash flow funds survival.

Expanded explanation

Principal paydown is hidden equity build — about 1–2% of price annually in early years. Don't trade cash flow for amortization, but factor amortization into total ROI.

Examples

  • $300k loan: ~$3k year-1 amort vs $3,600 annual cash flow.

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