When your making money either buying and selling property or you have cash flowing properties, how do you manage your money ? What do you do to maximize your dollars ? Do you build up your profits and save for another investment or do you pay down your debt on your loans that you have ? or maybe you put your profits in the bank and let it earn interest ? etc ...
I think it depends on your specific situation. Are you in accumulation phase, where you haven't reached your RE goals around cashflow, amount of RE owned,...
Or are you in the I'm happy with what I've got: I've met my cashflow goals,...in which case you might be more into paying down debt.
At least that would be my thought process...
IMO, debt is DUMB. Any debt for an APPRECIATING asset (like RE) must cost LESS than the rate at which the property is appreciating! Otherwise you're playing a LOSING GAME.
Any other debt, like on things that go DOWN in value is doubly STUPID. RE should be a PART of your investment portfolio, not the only thing you invest in! RE has been as high as 40% of my portfolio but is now down to about 30% including my residence.
It would have been a bit higher but I haven't found anything to invest in this year. I'm an opportunistic buyer, but I'm not going to do a deal just because my percentages are lower than they normally are.
Well I agree with you in that too much of anything isn't a good strategy. (So by the way I am 50% in RE).
But I wouldn't go so far as to say Loans are bad in all cases. If you've got a good investment where you feel like appreciation projection is right and cash flow is right (to meet specific ROI goals you've set for yourself). Loans are a great way to leverage and acquire property.
I tend to be pretty conservative when I deal with loans (Always 20% down at least) and always fixed. But I also tend to hold property for the long-term.
I have found Loans to be a great way to leverage and acquire assets, assuming like everything else you pick the right investment.
But again, I really think it comes down to what are your specific Cashflow and investment goals. My $.02's ...