Purchasing a cabin as a STR

[Jose Rocha]

Hey everyone! My wife and I are planning to purchase a cabin in Big Bear, CA and use it as a STR on Airbnb and a vacation home. Would it be smart to use the extra cash flow after paying the mortgage to go to the principal and pay the mortgage sooner? Or would it be smarter to save the extra cash flow and possibly buy another home, whether a STR or a LTR in a different location? Or even do half and half, half go to the principal and the other half go to saving for a down payment??

What do you guys think?? As always, everyone's opinion is appreciated!!

[Nathan Gesner]

Quote from @Jose Rocha:

Would it be smart to use the extra cash flow after paying the mortgage to go to the principal and pay the mortgage sooner? Or would it be smarter to save the extra cash flow and possibly buy another home, whether a STR or a LTR in a different location? Or even do half and half, half go to the principal and the other half go to saving for a down payment??

I would start by ensuring you have an appropriate reserve to handle a downturn in the market or major repairs. Then I would focus on saving up for another investment. Rinse and repeat. There is typically very little benefit to paying the mortgage down early in fact could actually hamper your goals.