#AskBP 082: Should Cash Flow Be Used to Pay Down the Mortgage or Invest in More Properties?


Cash flow is a great thing when it comes to rental properties – but what is the smart thing to do with it? That’s the question Brandon unpacks on this episode of the #AskBP Podcast! Stay tuned…

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About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.


  1. Dominick B.

    Thanks Brandon for continually providing great information!

    Even though using your cash flows to invest in more properties may be more risky because you are leveraging more, wouldn’t a different type of risk be reduced by having multiple properties/units?
    1 vacancy out of 1 unit is 100% vacancy; whereas, 1 vacancy out of 2+ is obviously better. And you would still receive cash from the occupied units.

  2. Roy N.


    A balanced answer. I’m of the same view as Darren, you need to know here you are going before you let out the clutch.

    And, it’s not an either/or decision. You can both pay down your debt faster and set aside retained earnings for future acquisitions, but you need to plan it out. Given the way mortgages work in Canada, Igor (if investing at home) also will have an opportunity to tune his strategy every 3 – 5 years when his mortgages roll-over. We tend to lean heavier towards debt repayment during the first term of a mortgage as that is when you can eliminate the most long term interest costs.

  3. Jason Moore

    My opinion based on my experience has been to do a little of both. You can stretch yourself slightly to get a rental working for you then mix in a couple of flips. Take the some of the profits from the flips pay down the mortgage on the first rental at an accelerated rate. After 4-5 years of consistently doing this you should be able to have a couple of at least nearly paid for rental units…generally speaking of course!

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