Pay off Primary or Buy Rentals?

[Ryan Williams]

Hello, I've been tossing this idea around and doing the math and would love the communities thoughts - 

Theoretically, let's say your annual income would allow you to save $100K a year. Would it be better to pay off your primary residence in the span of 3-5 years using that savings, or buy 1-2 rentals a year that break even/have a little cash flow?

I think the freedom of not paying your primary mortgage would be a huge stress relief and allow you to deploy cash quicker in the future and feel safer taking risks when you know your own living situation is covered.

On the rental side, I know the magic ingredient in real estate is time and the sooner you get properties, the sooner they appreciate and are paid off by tenants and 5+ rentals 20-30 years from now would definitely be worth more than the one primary.

Would love anyone's thoughts on how you would go about this situation! Thanks in advance!
 

[Andrew Freed]

@Ryan Williams - Leverage always increases your returns. If you are paying off a 3 or 4% mortgage, why not just take the additional cash and transition that into assets that provide a 8-10% return. If you're looking to scale quickly, putting the least down on cash flowing assets and buying as many as possible is the way to that path. If you are near the end of your journey and simply looking for stability and low overhead then I could see paying off mortgages, however that is not the most adventegous from a wealth building perspective.