OT: To escrow or not to escrow....

I do it for ease of mind only. Unless out have tons of property or high value properties where the interest you earn by keeping makes it worth the extra effort I just escrow on my properties for the peace of mind. I'm a very small operation though.

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I do it for ease of mind only. Unless out have tons of property or high value properties where the interest you earn by keeping makes it worth the extra effort I just escrow on my properties for the peace of mind. I'm a very small operation though.

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I hear you. That's kinda my thought on it. I only have one at the moment. It rents for $850-975, depending. Mortgage without the escrow is $248. Adding the escrow would be another $132 a month. Problem is, I have to pay a deposit into the escrow to set it up which is about $1,100. Of course, when taxes are due here shortly, it'll be about $950 for those, so not a big difference.

Be disciplined and keep your money. Don't float the bank. It is a matter of GP (general principle).

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No escrow here, I like to hold onto my money as long as possible. The only way I would recommend escrow is if you're horrible at managing your funds.

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And see, things like this are why I rethink it. Not horrible at managing it, but only started renting again a couple of months back. There are some other things that funds from that account have to go toward each month, so the trick is simply feeling comfortable that the amount in the bank is truly "liquid" if ever needed.

Obviously, I know without the escrow that homeowner's and taxes are going to have to be accounted for (and they have been for the last several years just fine). The property generally makes enough for it to not be a concern. But, then there's the whole having to write the checks and mail them off or go to the courthouse, etc. Those are just a pain in the arse. And, as pointed out above, the interest lost isn't a big deal, really.

In the case of that particular property (and your stated ability to manage your funds), it seems there really is no reason to escrow it. Your monthly rent nearly pays the taxes for the year $850-975 vs ~$950. Often times banks will fiddlefart around with the escrow as well stating that for the upcoming year you need to pay more in on a monthly basis (with some really shitty calculations that you then have to argue). With only one property and the numbers that manageable, it would seem that escrow actually is just adding a step that you don't need.

My thought is generally 1-3 properties (unless high dollar), escrow often doesn't make sense. 3-6 escrow starts to become more attractive for time saving purposes. 7+ keep yo money as long as you can if you can manage it well.

True. Escrow's are really just for laziness and the guarantee that you'll have money set aside. I stick with the Escrow just because I don't want to have to worry about having the money ready once the tax and insurance bills come due, and just in case I'm tempted to withdraw that money for something else that comes up.

FWIW, at one time I had 4 rental properties that I let for over 15 years but have sold 2 & paid off other 2 over the last coupla years...

I found it was just easier to add in taxes & insurance into mortgage. Was easier to calculate my rent payments & I didn't have the hassle of dealing with insurance & tax payments if they were due when I might've had 1 or 2 properties vacant or unexpected bills (medical/tuition/kids/vehicles/necessary property repairs/maintenance) etc... JMHO...

For most people, escrow isn't an option. The mortgage company forces it.

And yes, you'll always slightly overpay in escrow, but whenever you pay off the mortgage and/or sell, you get the overage back a few weeks later.

This is where banks play alot of hanky panky because nobody tracks their amortization day by day and escrow balances. Banks are able to intentionally make clerical errors that if they ever get called on, they are just clerical errors.... that make millions of dollars.