Sell house for 200k and invest? Or pay off home loan?

[Sherry Byrne]

Which would you do? I am 63yrs old. Own about 1/2 my portfolio of 55 rental houses with no debt at all. I have also paid off my own personal residence years ago. And I like not having a house payment.

But I took on a big remodel on a house I intend to live in for at least 2 yrs. I borrowed 225k for it. And I am about ready to move in.

Question is....what to do with the one Iive in now? I will clear maybe 190-200k on it.

I can borrow $225k at about 3.75 for new house. So should I use the 200k from sale of current home to invest? (And in what?) Or should I just pay off the construction loan on new house and continue with no house payment?

[Bryan Devitt]

Originally posted by @Sherry Byrne:

@Bryan Devitt

One more thing...some would say that sitting on RE worth maybe 400k+, (new house) and using it for personal residence, is not the smartest way to do business. I am just trying to stay open minded to new ways to earn money.

 What is "smart" varies wildly from investor to investor. Having zero debt is smart to some and being leveraged 100% is smart to some. It seems most are comfortable with 70 - 80% leverage on every property they own but that obviously isn't your goal. I know you can make more money using the leverage you can create but would that make you happier? Money is a means to an end, where you want to be in life will answer what you should do to get you there. If you're happy where you're at and with the passive income you're making, then pay it all off again and sleep well at night. If you think you need more income then leverage what you have to create more income but make sure you don't do something because someone else thinks you should. They don't have your goals in mind, only you do.