Smart to pay down the mortgage sooner with low interest rate?!

[Kegan Brenner]

Hello all, I am new to the group and wanted to start by asking a question on our business office building. My wife and I own a dental practice and purchased our building. Purchase price was $2M and we financed $1.7M @ 4.32%. Our mortgage payment is $12,849.05 per month. Now I know with that we got a great interest rate and at first I planned to not pay it off early as our tax break is helpful. However, now that we are exploring real estate more I was considering paying off the mortgage earlier to have more cash each month to invest elsewhere. My questions are:

a) Is it worth paying that 15 year note off earlier with that interest rate?

b) If so, does anyone recommend the method of making 2 half payments per month? Is this a good strategy that actually reduces the life of the loan? When using this method, how do I go about this with my bank?

Thank you all in advance!

[Jay Hinrichs]

Quote from @Dave Foster:

@Kegan Brenner, We set up one of our sons in an optometric practice similar to you.  Where the practice is the tenant.  And the real estate is it's own holding company.

 If the practice is successful then raise the rent on the tenant.  This keeps the money in your family but transfers it to the real estate holding company.  So it lowers the net profit of the practice which = lower taxes to the practice.

The higher rent is offset by depreciation and mortgage write off and operation expenses.  So probably at a much lower tax rate than the practice.

Any extra income goes to purchase more real estate with higher depreciable basis to offset the additional revenue from the rental to the practice.  And so forth and so on - as long as real estate continues to be this tax advantaged.

keep the great rate.  Use the excess cash to buy more real estate

Genius Move !!