Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
General Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 7 years ago on . Most recent reply

User Stats

225
Posts
124
Votes
Peter Schuyler
  • Fort Myers Beach, FL
124
Votes |
225
Posts

Extra 50K better to pay down a Rental Mortgage or Re-invest

Peter Schuyler
  • Fort Myers Beach, FL
Posted

This type of question may have been asked in the past.  

If I have 50K in cash to invest outside my retirement.

Is it better to pay down the liabilities on my rental properties that have mortgages at 4% or invest in another property that generates 8% cash on cash and use that money to pay down all the debt, including the new mortgage it will have?

I think I know the answer, but curious what others might do with the 50K.  Some say accelerate paydown, others say debt is cheap, so buy another property with the 50K as down payment, borrow the difference and keep going.

Most Popular Reply

User Stats

1,946
Posts
2,152
Votes
Ned J.
  • Investor
  • Manteca, CA
2,152
Votes |
1,946
Posts
Ned J.
  • Investor
  • Manteca, CA
Replied

On this forum, you are likely to get about 90% of the people saying to reinvest the $$....you will get way better returns than paying down a 4% loan. Which is likely very true if you do the right thing with the $$ and can tolerate some risk....risk that includes losing $$.

Go to a Dave Ramsey or Suzy Orman forum and you will get 90% of them saying to pay off your debt.... its a much lower yield on your "investment" but very low risk.

It really depends on your risk tolerance and what you want to do...what is your goal? If you want to expand and generate more and more cash flow then you keep leveraging and taking on more "good" debt that pays larger rewards.

If you can pay off your mortgages quickly and own the properties outright and the cash flow from them will be all you need to reach your financial goal, then that may be the best path for you

If you want to build wealth, invest the $$

  • Ned J.
  • Loading replies...