Credit Rating, Thoughts on Paying Off Rental Property

[Kem M.]

Hello all,

Two questions.

1. How does investing affect your credit score overall. It seems that constantly applying for a mortgage (thus resulting in multiple hard credit checks) and carrying a large amount of debt would severely damage your credit score and make it harder to get loans. Thoughts?

2. I have heard some say that you should pay off your primary residence first, and enjoy the tax benefits on the interest accrued from your rental property mortgages. However, if you continually buy houses, live in them for a few years, and then move/rent them out, this doesn't exactly apply. Is it still a good idea to pay one rental off at a time, then pull that extra income into paying off your second property, and on down the line (debt snowball)? Is there a better strategy that anyone recommends? 

[Ruth Bayang]

Originally posted by @Kem M.:

Is it still a good idea to pay one rental off at a time, then pull that extra income into paying off your second property, and on down the line (debt snowball)? Is there a better strategy that anyone recommends? 

You will get varying answers on this one. Ultimately, it depends on your comfort level and how much debt and risk you are willing to carry. 

Regarding apply for mortgages and your concern with multiple hard credit checks, the way to get around this is using private money instead of obtaining financing through banks. Traditional banks are only ONE source of financing. There are many other sources.