EP178: Should You Pay Off Investment Properties Quickly?

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Many investors have asked us about the most effective way to pay off rental properties quickly. However, I think that sometimes investors get ahead of themselves. Before you determine how to accelerate your loan payoff, you should decide if it’s the right option for you to do so.

On this episode of Investing in Real Estate, Natali and I are discussing the four questions you should ask yourself in order to determine if you should quickly pay off a mortgage or note. We’ll talk about evaluating interest rates, covering your expenses, and more! Don’t miss episode 178! 

More About This Show
In order to determine if you should accelerate your payoff date, there are four key areas you should consider. There is no one-size fits-all when it comes to finances, so you’ll need to survey the options, and how they will work for your individual situation.

  1. Do you have other investment opportunities? It’s fine to pay down your mortgage if you don’t have any opportunities available to you at the time. But if a great deal comes across your desk, you may want to take the cash flow from your tenant to purchase an additional rental property. 
  2. What is your tolerance for debt? If you’re in a Dave Ramsey mindset, you’ll probably be focused on paying off your debt as quickly as possible. On the other hand, if you’re interested in using leverage to grow your portfolio, paying off the loan can wait. 
  3. What is your time horizon? Your investment strategy will likely be different when you’re 30 versus when you’re 60 years old. However, it’s not all about age, it’s more so about mindset. It all depends on how quickly you want your properties to cash flow.
  4. What is your required monthly income? If you’re at a time in your life where you’re using your rental income just to make ends meet, you should probably keep your cash flow. If your rental income is just icing on the cake, you might be more inclined to put it toward paying off debt.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • How can you purchase an additional property if you need your rental income for personal expenses?
  • How can you determine if it makes sense to funnel funds toward interest?
  • How can you learn about quickly paying off a mortgage?
  • What information should you put on a spreadsheet in order to determine if you should pay off your property?
  • And much more!

 Episode Resources
How to Pay Off Your Mortgage in 5 Years by Clayton and Natali Morris
Loopholes of Real Estate by Garrett Sutton
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As a real estate investor, should you be concentrating on paying off investment properties quickly?