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Investing In Real Estate Podcast

Today’s first caller has $200k in equity in his primary home. He’s thinking about leveraging his equity in order to pay off a rental property. Is that a good idea? That’s the first question I’m answering on today’s show!

This Q&A episode of Investing in Real Estate features three great listener questions on using equity to pay off debt, what to consider before you sell a rental property, and changes to the mortgage interest deduction in 2025. Click play to hear my answers to your investing questions!

On this episode you’ll learn: 

  • What to consider before you pay down the mortgage on a rental property.
  • How to decide if you should sell a property in your portfolio.
  • What you should know about changes to the mortgage interest deduction.

What to Consider Before You Pay Down the Mortgage on a Rental Property

I’m normally a huge fan of using home equity to pay down debt. But under normal circumstances with a good performing asset, you should have your mortgage covered by your monthly rent. Instead of paying down the loan on your rental property, you might consider adding more assets to your portfolio.

How to Decide If You Should Sell a Property in Your Portfolio

As a buy and hold investor, there should be few scenarios in which you sell a rental property. If you have an underperforming property, your best bet would be to utilize a 1031 exchange. But if you’re thinking about selling because you’re a tired landlord, my suggestion would be to hire a property manager. Remember that real estate investing is the number one way to build wealth, and that owning performing assets can help you fund your lifestyle, your retirement, reduce your tax burden, and so much more.

What You Should Know About Changes to the Mortgage Interest Deduction

The mortgage interest deduction allows homeowners to take an itemized deduction for the interest paid on their homes in a tax year. Currently, the limit is set to $750,000 as part of the Tax Cuts and Jobs Act. However, after 2025, the number will return to it’s previous limitation of $1M.

Ask Me a Question at morrisinvest.com/clayton

Episode Resources
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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.

AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning, at NO additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. However, this does not impact my opinion. We recommend them because they are helpful and useful, not because of the small commissions we make if you decide to use their services. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.

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Posted on

November 27, 2023

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