Is it better to pay off your mortgage or invest in real estate? This is a common real estate investing question that stumps a lot of homeowners and investors. And on this Q&A episode, we’re going to explore your options.
On today’s show, I’m answering three listener questions on paying off your mortgage, turning a primary home into a rental property, and how to invest with no job. Join me for this episode of Investing in Real Estate to learn more about making financial decisions as it relates to investing!
On this episode you’ll learn:
- How to decide between paying off your mortgage and investing.
- What to consider about turning your home into a rental property.
- How to grow your real estate portfolio if you don’t have a job.
How to Decide Between Paying Off Your Mortgage & Investing
Personally, I don’t believe you have to choose between paying off debt and investing. Why not approach both goals at once? Use the method we describe in our book to start paying down the principal balance on your mortgage. You can either divide up the equity and target both goals, or pursue other financing options to build your real estate portfolio. If you’re focused, you can do both!
What to Consider About Turning Your Home Into a Rental Property
I find that nine times out of ten when someone wants to turn their home into a rental, the numbers just don’t check out. Rental rates usually don’t keep up with the value once you exceed around $175,000. I would consider looking into a 1031 exchange. Or if you’re committed to keeping this property, you could tap into the equity via a HELOC and grow your portfolio that way.
How to Grow Your Real Estate Portfolio If You Don’t Have a Job
In this scenario with two paid off rental properties, I don’t think that being unemployed is an insurmountable barrier. Here are some options I see:
- Reach out to local banks to see if they can provide a HELOC.
- Consider non-recourse financing, which is asset based.
- Partner with a relative and utilize conventional financing.
- Above all, you can book a call with my team and we can help solidify your options.
Ask Me a Question at morrisinvest.com/clayton
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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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