Pay Off Debt or Invest?

2 Replies

I searched this site and saw other similar questions, but everyone’s situation is unique. I have some “bad” debt. It totals about $15,000, so not horrendous, but I still hate having it. These are approximations--$2,700 on a Menard’s card, $5,000 is on student loans, and about $7,500 is on a credit card with no interest for the next several months. I also already have rental properties…a 3-plex, a one-bedroom house, and an apartment that is above the house that I live in. My house that I live in is paid off, but I have a mortgage on the one-bedroom house and on my 3-plex. I have about $2,000 each month that I can do with whatever I want after bills are paid. I am torn about what I’d like to do with it. I really would like to save and invest in another property, and then use all that new cash flow to pay off my debts. However, if I just bucked up and threw all my current cash flow towards my standing debt, I would pay that off in just over seven months. I can’t decide which is the smarter move. I believe in being (bad) debt-free, but I also believe in increasing my income. I’ve been looking at a duplex that would give me an extra $1,000 monthly. I bet I get different answers, but what would you do? What should I do? I am new to this site, and this is the first question I’m throwing out there.

Everyone has a different opinion. That being said, I personally am of the opinion that the investment market will be changing shortly. I know in my area deals are drying up. Therefore I personally am putting an emphasis on growth now. When deals dry up my first emphsasis will be on paying everything off. Again everyone has a different risk tolerance, position etc. We are duel income low expenses no kids so this works for me. 

If you are absolutely confident that the duplex can net you $1000 a month, I'd take that. Then you can pay off your bad debt in five months when there aren't good deals staring you in the face.

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