All Forum Posts by: Dan N.

Yes, and also

 The approach here is actually 
a) what's the future plan with the house
b) what's the future interest rate projection. 

The @Joe Villeneuve method is easy to understand when interest rate is low and I am doing that as well.


So in all practical matters, for all cash-flow property that's still under free cheap money regime, I never pay off the mortgage BUT
for high interest rate property (purchased in the last 24 months), I did pay more of the interest/principal just like the poster asked, second reason why I'm doing this is because I want to use the home in the future as retirement. If we don't pay it off earlier while I am still in my productive age, that mortgage payment become an issue when I am no longer working.

There's no "right" answer. It comes down to where you fall on the risk spectrum. 

Some people advocate leveraging as much as possible so you scale up faster. This is the correct strategy when you only look at the numbers, but if something goes wrong and you need cash now be sure you have a healthy emergency fund.

Some people advocate paying off as much debt as possible as fast as possible (Dave Ramsey). This minimizes your risk significantly, but scaling up and building up cash flow will be much slower.

Personally I used to pay extra on my mortgages every month. I looked at it like a savings account because I was saving having to pay my interest rate on whatever extra I put in. I also liked increasing the amount of my mortgage payment that went to principal every month. I ultimately stopped doing it because currently I want to increase my cash on hand to invest in another property. I tend to be more conservative with my personal finances and don't mind taking a little more time, so after I add another property to my portfolio I may start paying more to my mortgages. I call it "digging my moat deeper" because I'm reducing my debt burden.

2...always.  All you're doing with the first one is paying FOR your equity...not gaining anything.  Your tenant is already doing that for free.

However, if you need to put 35% down to get a minimum CF, you're buying a bad deal to begin with.

 Thanks Yinka. I'm a Real Estate Data Scientist, so I used Python/Pandas/GeoPandas. Although any non-coder could create these visuals for free with QGIS and the US Census datasets. And awesome, good to know, thank you!