What to do with saved money

[Tom B]

Hi Group, I'm trying to decide what to do with some saved money.  My choice is to either pay off the loan on one of my office rental properties or use the money to buy something else.  Here is the particulars.

Location is Tampa, FL.

I own two small office condos.  Both are rented and creating a small positive cash flow of about 15% monthly.

One of the units I owe about $50,000 on.  It has an interest rate of 3.55%

The other unit I owe about 70K on.  It has an interest rate of about 4.5%

I have $50,000 cash.  I'm ready to pull the trigger on paying off the first unit.  I would use the excess monthly income to pay down the remaining unit faster.  The goal being payoff this second unit before I am forced to refinance the loan which is in about 2.5 years.

Each unit is probably worth about $125k each.

As I said, I'm ready to pull the trigger on this but I'm wondering if that is the right move, I've been thinking maybe I should take this money and instead make another purchase.

Thanks in advance for any insight or opinions.

Tom

[Steve Vaughan]

Congrats on saving @Tom B!  The beauty of being disciplined enough to save  is the  options it gives you.

Neither option sounds foolish to me.  Pay off or grow. Deadlines would drive my decision more here.  If you really don't want to have to qualify and go through the pain and expense of a refi in 30 months (that would be me), pay it off!  

Sounds silly to payoff such cheap money, but I like the peace of paid off commercial property especially so I'm not reporting or answering to the bank anymore, ever.  Most commercial loans have annual financial reporting requirements.  

Depending on what you're complete financing picture is like (other consumer debt?) and what your long-term goals are (want to own 100 properties or just a couple for retirement?), I'd be ok paying off rather than chasing down maximum ROI. It gets exhausting. Good luck!