How do you like having paid off rentals?

[Tj M.]

I know people have different opinions on paying off rentals but for those who have how do you like it? Did it allow you to buy more properties faster,did you pay for the next property with cash or did you end up taking loans out on them later down the road? If you had to do it over again would you pay them off?

Looking forward to the reply’s.

Tj

[Frank Wong]

Paid off rentals are great it gives you holding power.  Regardless of economic conditions, you will be able to survive it.  I am taking one variable out of the risk of investing by having it paid in cash. 

I understand both sides of leveraging and owning houses outright.  In the beginning, an investor needs equity and leveraging is the best way to attain it.  Towards the middle (10yrs) of the investment career that need may not be as great and they want more cash flow.  That is when an investor wants their units paid off and netting them more money per deal. 

At some point, you have to evaluate your portfolio for risk and time. Do I want to own 30 houses netting me $200 a unit or do I want to own 7 houses cash that pays me the same?  What has more risk 30 houses with loans or 7 houses paid off?   How much time will I have saved owning 7 vs 30?

Having your money sit in your house is NOT DEAD EQUITY.  I understand why someone would say that but if my house pays me every month it is not dead.  It is being utilized as the exact tool that I planned.   It's like saying someone who invests in treasury bonds is dead equity.   But no one ever says that. 

In the end, it depends on the investor and how they run their business and what's most important