Free and clear vs mortgages

[Tony Furgiuele]

I have been talking to fellow investors about wether it is better to own property free and clear or have some kind of money against a property even if it is a line of credit. Tax purposes is the answer I get when I try to dig a little deeper into why that is. I am new to the real estate gig so on my first buy and hold property I acquired I was able to take out a 5 year commercial loan on. The rent covers the mortgage and I will be free and clear in 3 1/2 more years. Then I would like to purchase a similar priced property and in my mind with 2 rents paying towards it I would be paid off twice as fast. This makes more sense to me but as I said I am new. Any advice would be greatly appreciated. 

                                      Tony 

[Andy Beis]

I don't think there is any one correct answer to your question. It really depends on the individual. I'm a fan on free and clean whenever possible but unless you have some alternative income stream that can allowed you to purchase properties that may not be very realistic. The faster you can pay one off the better the cash flow. I see nothing wrong with using your equity to allow you to acquire more property. I tend to be a little on the conservative side but it's a business model that many have used successfully !