To pay off rental properties or not...that is the question!

To pay off rental properties or not...that is the question!

Real Estate Investor · Yakima, WA · Member since 2014 · 79 posts · 25 votes
I am developing my business plan for buying and holding. I was talking out some ideas with another investor, and she said you should never pay off your properties, and never pay all cash. It seems to me that if you don't have a mortgage to pay that your profit would would be a lot greater. And you would be less likely to over leverage yourself. Am I missing something? What are the pros and cons? Am I missing something?
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Investor · Hampton Roads, VA · Member since 2014 · 1k+ posts · 418 votes
12y

@Brandon Luke My plan is the same as @Pete T. 

I don't like getting up in the morning to pay interest to a bank.  It's just the way I live life and it's worked well.  

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  • Real Estate Investor · Houston, TX · Member since 2014 · 42 posts · 5 votes
    12y

    To buy in all cash has less risks and you also have a lower ROI. When you leverage a property, you benefit from OPM and make a higher ROI. A happy medium is good!

    We typically have Investors do 5% down and get a home-buyer to pay an additional 10% down for the Investor. We have found from experience that an 85% LTV or better is safe.

    Feel free to send a message or call if you need further assistance. 

    Barry

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