If you’ve got a decent chunk of change, should you apply it toward high-interest credit card debt? Or is it better to use that money to start investing? That’s the first question I’m answering on today’s Q&A episode!
On this episode of Investing in Real Estate, I’m answering three of your questions on paying off debt, borrowing against paid-off rentals, and how to handle high property taxes on a rental property. To hear my answers to your questions, tune into this episode!
On this episode you’ll learn:
- How to decide if you should pay off debt or invest.
- The best methods for leveraging paid-off rental properties.
- How to mitigate high property taxes.
How to Decide If You Should Pay Off Debt or Invest
Paying off debt and investing are both great financial goals, and I don’t think this decision has to be either/or. If you’re in this position, I wouldn’t necessarily suggest throwing all of your cash at either option. Perhaps look at transferring your high-interest debt to zero percent interest credit cards. I would suggest using some of your cash as a down payment on a rental property. This allows you to increase your net worth and bring in some cash flow. In other words, utilize other people’s money and work toward both of your goals simultaneously.
The Best Methods for Leveraging Paid-Off Rental Properties
Looking to borrow against the equity in your rental properties? Options include portfolio lenders, private lenders, hard money lenders, and more. I can recommend Direct Lending Partners and Dan Kraus at Churchill Mortgage.
Depending on the price and ROI of your properties, you also may want to consider a 1031 exchange. Check out our blog post and video on the 1031 process.
How to Mitigate High Property Taxes
For me personally, high property taxes are not a deal breaker. I care more about the overall ROI—so if other expenses are low, I can take the hit of higher property taxes. See my video and blog post on this topic for further explanation.
I’d also recommend working with a great CPA to ensure you’re tax planning year-round, and taking advantage of the numerous tax benefits available to real estate investors. We recommend the team at Wealthability.
Ask Me a Question at morrisinvest.com/clayton
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Direct Lending Partners
Dan Kraus – Churchill Mortgage
The Ultimate Guide to 1031 Exchanges
5 Powerful Benefits of a 1031 Exchange
What Every Investor Needs to Know About Property Taxes
How Much Profit Should You Make on a Rental Property
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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