What is the best way to pay down your first property?

[Will Stewart]

I just purchased my first rental property this week. I put 20% down and my loan amount is not too bad. My question is, should I take extra from the passive income to pay the loan down faster in an attempt to acquire another property faster or just make the minimum payments and be patient? I also have recently gotten a HELOC. I have had some people tell me not to use it unless I can pay what I borrow within 6 months. Others have told me I can use it and then refinance. I am brand new so I would love different opinions. I met with my realtor and have created a 5 year plan but I would like to accelerate it if at all possible. Maybe I am just being to impatient. Any advice would be appreciated. Thanks everyone!

[Jason Wray]

Will,

First off not every opinion is perfect or geared towards your goals. I would just take a little time to come up with a comfortable game plan based on cash on hand, equity, and time line. There is nothing wrong with being impatient and wanting to fill that urge to buy and accumulate more REI. There is no need to rush to pay off your rentals because the market can fluctuate and that equity can go up and down. As long as you have enough equity to pull out you can always use it to buy more investment properties.

Heloc's are good for small projects but not so great for using as a down payment (in most cases). Get rid of the HELOC ASAP because a liability is not as good as cash in the bank. If you have 10-20% in any of your properties I would suggest pulling the trigger on buying what ever fits your fancy!