Should I borrow or use own money?

[Lou M.]

I've been told that having too much equity in rental properties is not good. But I have resources that are not working for me. We all know what banks are paying in interest these days. The stock market is too risky. So is it wrong to invest (pay all cash) money in rental properties that can produce a nice return?
Is there a down side that I'm not seeing?

[Brandon Turner]

Lou M. - A lot of investors will tell you the ROI will be much higher when you leverage to the hilt and that the taxes are higher when you don't have that "interest payment" deduction.

Sure this may be true, but to quote Dave Ramsey, "100% of foreclosures last year happened to people with a mortgage." In other words - loans add risk and if you aren't comfortable with that risk - don't take it. a 10% return that's almost risk-free sounds pretty darn good to me. I can't wait for the day when I can pay every loan off and just relax. For me - security is more important than maxing out my ROI.

Good luck Lou and keep us updated!