Pay off existing loan, or acquire additional properties?

[Amber Rhea]

Hi everyone,

I'm a new investor, finally pursuing a lifelong dream. I purchased my first investment property earlier this year, for $50,000. I put 20% down, so the loan was for $40,000. 

My husband and I are about to sell our primary residence and move, and we'll make a pretty sizable profit from the sale of our house. I want to use some of the money to help grow my business. I've considered two options: pay off the loan on my investment property, therefore increasing my monthly income; or put the money toward a down payment on one or two other properties. I can see pros and cons either way. I want to balance the amount of debt I carry without being "over-leveraged," and not throwing away too much of my own money. 

I'm curious to hear what approach other investors think is most favorable. Thanks! 

[Vik P.]

@Amber Rhea - What @Anthony McEvoy said is absolutely true. It really depends on what your comfort level is as far as acquiring debt. Personally I would go for more acquisitions (provided they are well thought and are bought in sound markets with numbers that make sense) and in turn more debt when starting out to increase your top line and also net cashflow Even with int rates going up I think the debt in the US is still very cheap imo. It was dirt cheap obviously between 2009-2012/2013 We are probably the luckiest in the world for us (as a US citizen) to be able to tie upto 10 (if you are single) or 20 (if married) fixed rate 30yr fixed fannie/freddie mortgages @5.5-6% with 15-20% (sfr) or 25% down (mf).