Pay down rental or invest in new properties

[Michol Murray]

Hello BP community! I've been lurking on the site for some time, but this is my official first post. I own a SFH in the Phoenix area, was my old primary home, and decided to keep it because I knew it would finally make me stop sitting on the sidelines about owning rental property. I am looking for some advice on the direction I should go regarding my current rental and the next rental properties that I purchase. My current rental is cash flow negative and also currently underwater. I am able to manage the negative cash flow with my day to day job, although it would be nice if the cash flow was positive. Would you recommend aggressively paying down the current rental loan, so I can at least break even? Or would you continue to look for your next deal and acquire properties that are cash flow positive to make up for what your losing on the first rental? Thanks in advance..

[Kevin Siedlecki]

@Michol Murray, of the two options, I would go out and find another property that cash-flows. Then you hopefully have  a real estate portfolio breaking even while the loans are paid down, and you can hang on to the underwater property until it recovers, or you've paid the loan down enough to refinance or sell.