Should you pay off your loan on rental properties?

More information here: https://investfourmore.com/2013/06/09/should-you-pay-off-a-mortgage-early-or-save-cash-flow/ I used the snowball method to pay off my first rental property in three years. Now I save my cash flow from my rentals in order to flip more houses and buy more rentals. If you hate debt maybe paying them off is better, if you want to buy as many properties as you can maybe you should save that cash flow. Many people feel all debt is bad, but debt can be a great tool if used the right way. I use debt to buy more properties and make more money. I always buy below market value, with plenty of cash flow to make sure I am not risking too much.

Comments

1. Thank you for the great advice. I am working a full time job and paying off a rental property. (1994 townhouse). I'm the type that likes to stay safe and buy one at a time. When looking for a good tenant, credit, references, and employment is checked. Do you have other tips on finding good tenants that stay for several years?
2. I am also doing the snow ball method 12 properties and all fixed rate and considering doing flip. Who are you getting for your home insurance. Most have limit her in TN. Currently using Allstates.
3. Does bank allow you to pay off mortgage early?
4. #Jason Khuttan We did a combo of flips and keepers. I used the debt snowball method and now have 13 single family homes paid off. We have one 30 year mortgage and one house that is owner financed. I love this business. I spent 39 years teaching and living frugally by choice. I did this on the side. Love it!!! I like your post..job well done. @Luke Beacon
5. whats your input on town homes/ condos.. in my area i can pick them up for 70k-110k have them rented for 800-1300 a month. only problem i see is that condo fees are ($200) eating at my bottom line/ cash flow. would it be smart to buy units that cash flow 200-300 a month?
   
   or multi unit properties? im interested in possibly a 4-6 plex in the 4-500k range.
6. How about you start by paying CASH for your first rental property and using the cash flow to get your next property and so on.
7. The debt snowball affect is the best way to pay off multiple mortgages. Start with the lowest mortgage and work your way up. This is how i paid off multiple houses:)
   very informative video
8. use a microphone
9. I just want to know why you have the properties in your name instead of starting a land trust and LLC to protect you?
10. Thanks.. Very low volume
11. We did a combo of flips and keepers. I used the debt snowball method and now have 13 single family homes paid off. We have one 30 year mortgage and one house that is owner financed. I love this business. I spent 39 years teaching and living frugally by choice. I did this on the side. Love it!!! I like your post..job well done.
12. With interest rates where they are, and tax deductions for the interest, it is a no brainer. You should be buying as many properties as you can on credit. Paying it off is kind of foolish.
13. I am just saving up in mutual funds till I have money to buy one out right and repeat the process with the additional rent and snowball to buy more and more outright. You have some negotiation leverage with straight cash and the housing market is WAY to high right now. It would not surprise me if we are about to pop another bubble. Less risk in buying out right and no worries if someone stiffs me on rent.
14. what is your opinion on interest only mortgates
15. A very helpful video on a difficult topic!!
16. Thanks for sharing! Surely rentals are something I would like to get into.
17. I worry the ARM will increase to the point where the mortgage payment becomes higher than the rent collected and I would have to come out of pocket to make up the difference.
18. I really want to get into owning rentals. The bank wont let me get a mortgage yet unless I have two years worth of time in working in the oilfields. Is there any other alternatives instead of using the bank? Private loans? If so, how does that work compared to a bank? Thank you
    Tom Schneider
19. Great video. Could you recommend a good portfolio lender. Many I've tried have restrictions of 3-4. This is the main reason I cant build my portfolio faster
20. Is this assuming you have a shit ton of extra income to make payments on the other 4 mortgages while you pay one off?