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Took me 2 years to figure out I was calculating interest wrong on my rental property loan
Honestly, I've been doing the interest calc on my duplex in Austin all wrong. I was just taking the yearly rate and dividing by 12 for the monthly payment, but I didn't account for how the principal drops each month. A buddy who works at a credit union looked at my spreadsheet and asked why my numbers were off by like $80 a payment. Turns out I was overpaying by about $960 a year without even knowing it. Has anyone else messed up their amortization schedule on a commercial loan?
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kelly3854mo ago
Yeah but how did your buddy catch that? I feel like most people wouldn't even think to check that deep unless they were already doing loan work. What specifically tipped him off, or did he just randomly ask to see your spreadsheet? That part really gets me because I bet tons of small time landlords are making the same mistake and just never find out.
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thomas_martinez4mo ago
Man @kelly385 I gotta disagree, lots of us small timers just trust the bank and don't dig deeper at all.
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morgan.logan4mo ago
Your buddy just randomly asked to see your spreadsheet" is what gets me too. I read somewhere that most people treat loan math like a black box and just trust the bank statement every month. It's wild how easy it is to be off by a hundred bucks a month and never catch it on your own.
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