Rental Property Investor · Prospect Heights, IL · Member since 2015 · 22 posts · 3 votes
I want to get a second property but must of my money is in the stock market. I have enough money in investments to pay off this house but I don't know if is the right decision if I'm trying to scale.
Investor · Philadelphia, PA · Member since 2016 · 73 posts · 43 votes
5y
I would say, better re-finance at the lowest rates ever now and use cash to invest in other rentals. Use BRRRR method and you have an exponential growth to your money. If you pay it off, you'll get hit more on your taxes.
Rental Property Investor · Des Moines, IA · Member since 2020 · 232 posts · 116 votes
5y
@Angel Perez So let me see if I understand this right. You've got rental #1, it generates $36k a year (don't know if this is you're gross or net) and it's got some kind of financing attached to it. And you're thinking about selling some/all of your stock market investments to pay off the financing on rental #1, so that you'll then own rental #1 free and clear. Am I understanding this right?
Rental Property Investor · Prospect Heights, IL · Member since 2015 · 22 posts · 3 votes
5y
@Rene Owczarski I'm making just a few hundred per year with this property and if I include property taxes I'm breaking even that's why I was thinking on paying it off
Rental Property Investor · Prospect Heights, IL · Member since 2015 · 22 posts · 3 votes
5y
I'm making just a few hundred per moth with this property and if I include property taxes I'm breaking even. This is why I was thinking on paying off the house
Investor · Philadelphia, PA · Member since 2016 · 73 posts · 43 votes
5y
I would say, better re-finance at the lowest rates ever now and use cash to invest in other rentals. Use BRRRR method and you have an exponential growth to your money. If you pay it off, you'll get hit more on your taxes.
@Rene Owczarski I'm making just a few hundred per year with this property and if I include property taxes I'm breaking even that's why I was thinking on paying it off
If you include CAPEX and vacancy reserves, you are probably loosing money. Paying down debt to increase cash flow is called buying cash flow. Given todays ultra low interest rates, it is not financially wise to pay down debt. You should be able to secure an interest rate under 4% and your stock investment is probably returning significantly more than that.
I recently purchased my first property. A duplex. I sold part of my retirement to finance it. $40,000. I would say that if you have to ask someone. DON'T cash it out. Watch more videos. Read more books. When you can make a decision based off of numerous things from your own research then you will feel much better about your choice.