More rentals OR less debt

[Andrew Perkins]

Hello!

Does it make sense to use the appreciation gained from our current rental properties to pay down our primary residence mortgage?  We currently cash flow about $600/month on 2 rental properties.  However, if we were to sell the 2 rentals and refinance our primary, we would either be saving $800/month or could pay our primary residence off in less than 10 years.  This would put me behind on our goal of 8 rental units, but would decrease our expenses and possibly allow us to grow faster with less liabilities.  Or does it make more sense to keep looking for additional rental properties every few years?  I'd really appreciate any thoughts on this!

Thanks!

[Joe Villeneuve]

I'm lost in the math.  Even so, I'd say your solution is going backwards.  The CF should be what pays down your personal mortgage.  If you sell the rentals and spend that money on your primary, you are in fact spending it...which means a one time use, gone forever.  However, if you "use" the CF from the rental to accomplish that payoff, once your personal residence is paid off, you still have the CF coming in...to pay off something else.

Spending the liquidated equity from a sale or a rental to payoff something personal, is in the end spending your money...one time.  Using the CF from that same rental, while keeping the equity intact, is actually letting your tenant buy your personal residence for you.  You can, and should, then sell that rental and take that cash to expand your rental portfolio.  If you spent that equity after the sale as discussed here, it's gone forever.  What's your next move then with the goal of expanding your rentals?