Potential Tools in a toolbox from a paid off rental?

[Joe M.]

2 part question.

So I am currently saving up for another rental.  It dawned on me, it wouldnt take that much longer to save and completely pay off my one rental I have now.  Potentially wondering if this gives me anymore tools in the toolbox. 

1. What would be some pros and cons of doing this instead of just saving 20% and buying another rental?  I understand the leverage benefit, but also the peace of mind with a paid off rental. Anything else I am missing from that debate?

2. If I did decide to pay it off, how would I turn that into another rental?  How exactly do investors use this to their advantage?

Thanks

[Casey Mericle]

@Joe M. a paid off rental will serve you well in times of uncertainty.  This is because you can lower your rent below everyone else in town that's leveraged and still stay full.  Not to mention the fact that at a lower rent rate you can have your pick of a worthy tenant instead of salivating over the 1st person to apply.

Oh and you can always get a cash out refi if desired to get another property when needed.  The good news is rates for those are typically less than traditional purchase finance deals.