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Updated over 5 years ago,

User Stats

67
Posts
14
Votes
Phil T.
  • Battle Ground, WA
14
Votes |
67
Posts

Should I pay off my mortgage or buy rentals?

Phil T.
  • Battle Ground, WA
Posted

I'll try to make this as short as possible, but I've got a question I can use some help with.  I've got an extra $900/mo or so right now that I'm saving to buy my first rental. My plan was to "snowball" the profit from the first rental into that $900/mo to buy a second, and so on.  I have a full time job, so I'm not looking to get into real estate full time, but it's something that I've been looking at getting into as kind of a side hustle for a while.  I was playing with a calculator online the other day and applied the extra $900/mo to the mortgage on my primary residence and if I did that, it would save me about 17 yrs on my mortgage (I'm about 2 years into that mortgage) and save me over $125k.  

My question is do I put the extra $900/mo towards rentals or pay my house off then save for rentals?  I'm aware of the theory that if I can get a better return than my mortgage rate (4.3%), then I should invest.  But on the other hand, $125 saved on interest isn't a small number and having the security of a paid off house would be nice.  I keep going back and forth on what to do.  Any thoughts?

Thanks!

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