Should I pay off primary residence mortgage and make it a rental?

[Drew Hollowell]

I have researched a number of real estate investing strategies and like the idea of having high cash flow with little debt and little to no risk - (who wouldn’t!) to achieve this, I am considering paying off my current primary residence mortgage at an accelerated rate, renting it out, and then repeating this process. I would progressively “snowball” each property’s monthly rent income into my primary residence’s mortgage payment until it is paid off and ready to make me more passive income as a rental property. Essentially, I would like to be a buy and hold invester without having to get a loan for an investment property. I realize basically all the return on my investments until I was satisfied with the amount of passive income acquired would be tied up in the home’s equity, but the convential way of using mortgages for investment properties just would not work for me and is too risky for me. I have extremely high student loans and would likely never be approved for these mortgages with their stringent requirements. Is this strategy a good idea? Or are there other suggestions that would achieve my goals? Am I overlooking an opportunity cost? 

[Anthony Dooley]

@Drew Hollowell Another way to achieve the same result is to stay in your house and use the money that you were going to pay off your mortgage to buy an actual investment property. A distressed property that you can add value to and that will cash flow well. Buying at retail price and renting it out at retail price usually equals zero after expenses. Buy it right and manage it well.