Leverage is your friend. Don't pay off your home, buy income producing properties and never look back.
By paying off your home you are only getting a return on your money of whatever your interest rate is. With interest rates around 4% it's much better to keep the leverage on your home and use that extra money to earn a higher return elsewhere.
Paying off your home is/can be saving for investing. Once you have enough equity in your home you set up a HELOC and use that as a revolving account for investing. If you do not want to use the equity in your home then ther eis no advantage to a investor to pay down. It is dead equity if you are not prepared to use it.
I remember when I first got into real estate nearly 100 years ago, I had a very wise broker that opened my eyes with a very simple comment. He said his strategy was to get $1 million in debt. In 1970, $1 million represented a gigantic amount of debt! His reasoning was as follows:
He wanted to be able to have $1 million in real estate debt and be able to service that debt possibly without any positive cash flow.. It was during the time, when 5 to 10% inflation was very possible. On paper, he would be able to make $50,000-$100,000 annually on increase in value of the property he had debt on. in that timeframe, the amount he was making on paper was significantly higher than what people were making on annual salary.
With that thought in mind, I would lean towards the content of leverage is King. I would also point out that you did not give enough of your current status as to strategy, risk tolerance, age, income currently, etc. etc. etc.
There are different options available for a private residence. You always have the ability to pull cash from that property by way of refinance. If you are flexible, you also have the ability to sell that home for a profit every two years tax-free and invest that money. I was able to do that numerous times during my estate building years.
Once you are able to answer many of the questions I stated above as to risk tolerance etc., it would be easier for others to give you suggestions as to which way they would go. It is always possible to make up for a mistake when you are younger than when you are looking closer to the retirement years. That would make a difference also.
This is not some mysterious questions with it depends answers.
It's just math.
If you pay of your house you avoid that 4% interest over 30 years.
You invest in real estate,
You buy a house for 40K, dump 50K into it and sell it in 3 months for 195K.
Which has made you more money?
Then when you have so much money that is just sitting around, where you can do both, keep investing and pay off your house... you do both!
I am telling you. NASA scientist are pretty smart!!
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