Pay off rental property mortgage?

[jIM_Ohio]

Sorry, I should have phrased that as the tax benefits of having the mortgage on a rental are not that much more significant than the tax benefits of having the mortgage on my primary residence.

I agree with the uncorrelated assets; that is why I'm finding the commercial real estate deal attractive. I have a good size REIT position, but this is a higher risk/reward deal.

One other way of tackling this is "buckets".

Buckets pool risk and sort thru the purpose of investments
Its a retirement technique I have read on other boards

1) Bucket 1 is cash- this is the money you live on- maybe 2-3 years cash supply
2) Bucket 2 is income producing assets which each year need to generate enough cash to replenish bucket 1.
You rental property and the commercial real estate would be great bucket 2 investments. Bonds and dividend stocks would be others
3) Bucket 3- this is money used to grow net worth. As bucket 2 slows down (inflation, sell bad real estate, other), you sell assets in bucket 3 (at a gain) and add them to bucket 2.

Then you can cushion ever selling at a loss, because when you move money from one bucket to another, you only do so in an up market.

Best of success to you. Hope my comments helped.

[NJDebbie]

We actually refinanced our primary home and paid off our rental. We've never regret the decision and our cash flow after utilities, insurance and property taxes are paid is about $1,500. I realized every family has distinct needs and priorities and for us doint this has provided us with peace of mind. Good luck with your decision and I must say Jim_Ohio is a smart guy.

[nsdavid48]

landlord

I own 12 rental properties. I used the equity in our home to secure a HELOC. Using the HELOC, I leveraged the money to buy 12 properties. My focus was and is to pay them all off as quickly as possible unless the mortgage interest rate is less than a guaranteed rate elsewhere.as soon as one proeprty was paid off, I used the cash flow to pay off another. It is ALWAYS cheaper to pay taxes than it is to pay interest. That said, it pays to pay off a mortgage early. My advice , without knowing all of your mortgage details, is to pay off a mortgage then use the cash flow to fund savings. Better yet, since the interest rates are so low right now, and depending on your age, I wold buy more rentals.

[falboe]

I agree unless tax laws change. There is talk of eliminating the personal mortgage deduction. If that happens, it may change your strategy.