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Updated over 6 years ago on . Most recent reply

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Prepay mortgage on rental property with negative cash flow?

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Hello everyone

I have my primary residence in NYC that for personal reasons I will need to convert to a rental, since I am moving out of state. I have done the calculations and I will come to a negative Cash Flow of about 850$/month. I am not considering selling the place but I bought it 2 years ago and NYC market has been pretty flat ever since.

I have an outstanding balance of 460k$ on a mortgage at 4.3%, which is 30 year fixed. Currently I'm amortizing 750$/month of principal, which will grow over time.

I have two other rental properties with positive cashflow of 200$ each.

What considerations should I take when checking if I want to prepay the mortgage on my negative cash flow property? For the time being I will be able to easily cover that cost.

I have no intention of getting into a new property anytime soon and any other investment vehicle, stock market, will probably not yield over 4% since it seems we are hitting a tipping point.

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