Anyone else paying down mortgages rather than buying now?

[David K.]

Seems I keep getting beat on properties going for full price and more. These deals often have low returns and function solely on best case scenarios in my opinion. Anything good is snapped up quickly. At this point with multiple properties I've debated on accelerating payments on everything until I find something good. Recently was outbid on a small condo which could rent for $1250, to a person who went all cash at 125k. Having 125k in cash sitting around, the COC on return would be 5 percent after expenses. At that point I'd rather go idle......being a landlord isn't as easy as ALOT of people make it out to be!

Anyone else in the same boat?  

[Thomas S.]

Paying down a mortgage on a income property is a terrible idea as a investor. If you have cash or equity it should be moved to a different investment vehicle not simply allowed to wallow in a property where it is essentially being sent to die. That is hoarding not investing and a embarrassing use of money. 

Every 100K in a property will suck $866/month directly off the top of your income based on a conservative opportunity value of 10%.

Take the money and invest in a income fund or REIT if you want to hold, do not burry it in a property where it will essentially kill your cash flow and turn the investment into a liability.

Simply because you are on hold does not mean your money should stop earning it's keep.