Is the 30-Year Mortgage Worth It? (The Answer May Surprise You)

30 Year Mortgage

In the era of bitcoin, everyone wants to be a disruptor — an iconoclast that tears down the old and ushers in the new. That’s how people become billionaires — right?


In that kind of entrepreneurial environment, the 30-year mortgage seems like a dinosaur. “Thirty-year fixed rate?! That’s what my grandfather told me to get! And he still refuses to get into an Uber.”


Well, sometimes you need to listen to your grandfather. Maybe this will blow your mind, but it shouldn’t. The 30-year fixed-rate mortgage is the best deal in the financial world. If you want to turn a good credit score into generational wealth, it’s your best friend.


Why? For three reasons …  

1. The Interest is Absurdly Low

Interest is the cost we pay for credit. If you have ever gone mortgage-shopping, you’re probably used to seeing interest rates in the 4-4.5% range. On a good day, you might see rates below 4%.


Compare that to as much 10-20% for personal loans, 5-14%+ for student loans, up to 13% for small business loans from a bank, up to 60% for invoice loans, and as much as 200% for merchant cash advances, according to Value Penguin. And don’t even get us started on credit cards, where interest rates of 20% or higher are the norm.


Yes, we’re in a low-interest-rate environment, and that may come to an end one day … but even if mortgage rates go up, other loan rates will too. The 30-year fixed-rate mortgage will still be among the best deals in town.

2. Your Payment is Locked for a Ridiculous Period

In addition to this low interest rate, the 30-year fixed-rate mortgage locks this rate in for a ridiculously long period of time. 


How many businesses get to lock in their cost of credit for 30 years and never have it change? With the 30-year mortgage, your debt service repayment never changes, making it easy to budget compared to other forms of business credit.


Almost no business can take advantage of 30-year fixed-rate financing … but the owner of the lowliest rental house can. 

3. It Provides Insane Leverage

Return-on-investment allows businesses to grow … but leveraged ROI makes them grow quickly


In this article, we demonstrate how adding a simple mortgage to a simple rental house increases the ROI from 6.5% to 17.5%, rocketing past the S&P 500 in terms of annualized return. And that’s before you take into account the many tax advantages of real estate ownership.


Other assets and businesses can be leveraged, but not with the ease that anyone with credit and income can achieve by walking into their local credit union. 




The 30-year fixed-rate mortgage is the secret weapon behind the millions of Americans who have become millionaires simply by owning rental property. With terms this good, it’s actually fairly easy to do.


Martel Turnkey makes it even easier by providing you with the properties themselves —rehabbed, rented, and ready to go. We can even provide you with detailed profit-and-loss statements so you know exactly how big a mortgage you should get to avoid going into the red. 


Want to put this Holy Grail of a business credit solution into practice, fast? Contact Martel Turnkey today!


Can I Buy Real Estate with my IRA or 401(k)?

REI with retirement accounts

Can I Buy Real Estate with my IRA or 401(k)?” If you ask a traditional financial planner, they will probably say “no.” Not unless you buy a share of a REIT … which they can sell you for a fee or commission. What a coincidence.


Surprise surprise — this is not the whole story. The truth is, the sections of the tax code that create these tax-deferral vehicles for retirement savings make no prohibition of what kind of assets you can use to make tax-protected investments. 


These financial advisors are only telling you that you can’t hold rental real estate in your IRA or 401(k) because that’s not a thing they can sell you. 


So what does it take to invest in real estate with your IRA or 401(k)?

What Kind of IRA or 401(k) Do I Need to Hold Real Estate in my Retirement Accounts?

Self-Directed IRA

This is actually the easy part. If you have an IRA with a custodian who tells you that you can’t use it to buy real estate, all you need is a self-directed IRA from a custodian who creates and maintains these accounts for a small fee. A simple Google search will yield tons of these guys.


You can get a self-directed version of any IRA in your arsenal — traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, IRA BDA, whichever. 


Just remember, you need to find a like-kind IRA to do this. If you have assets in a SEP IRA, you can’t move them to a Roth IRA without penalty. It has to be SEP-to-SEP, Roth-to-Roth, etc.


Once you have a like-kind self-directed IRA account set up, you can transfer cash from your old IRA to your new self-directed IRA and use that cash to start buying real estate!

Solo 401(k)

If your employer set up your 401(k) you almost certainly can’t use that account to start buying real estate. It was probably set up by a money manager who will tell you “no.”


But if you leave that employer and get to take that 401(k) with you, you can get a “solo 401(k)” from the same custodians that offer self-directed IRAs. You can then transfer assets from your old 401(k) into the solo 401(k) and start buying real estate with those funds.

Are There Special Rules I Need to Know to Hold Real Estate in my IRA or 401(K) Account?

First of all … you can’t buy your own home. If you try to do that, the IRS will view this as a withdrawal from the retirement account for your own benefit, and you will face taxes and penalties. Sorry.


Secondly, you can’t “actively” manage your real estate investments. Well, you can, but this will open you up to UBIT — unrelated business income tax. The whole point of these accounts is to avoid taxes, so subjecting yourself to UBIT defeats the purpose.


Here’s how it breaks down:


Fix-and-flip, rentals you actively manage yourself = UBIT. Bummer.


Passive investment in syndications, rental real estate in the hands of property managers = No UBIT. Super!

What Are the Downsides of Buying Real Estate in an IRA or 401(k)

All income must stay in the IRA or 401(k), and all property expenses must come out of funds from the IRA or 401(k). You can’t commingle funds outside of the account to make repairs or pay the property taxes. It all has to stay within the IRA or 401(k). Anything that goes in must follow the rules of contributions, and anything that goes out may be subject to taxes and penalties.


One big drawback of buying real estate with an IRA or 401(k) is that you usually can’t get a traditional mortgage, which means you lose the power of leverage. You may be able to find an unconventional or private lender, but this may trigger UBIT, so be careful.


Finally, since money in an IRA or 401(k) is not taxed, you don’t get the tax advantages of real estate investing. 




If you want to buy real estate without a mortgage loan with your IRA or 401(k), the turnkey rental properties we source for clients at MartelTurnkey make an excellent choice. Our houses  are rehabbed, rented, and under the care of a property management company when you close. Contact us to see what we have that might fit your needs!