Pay off primary residence or invest

[Jessie Redd]

I have a friend who is trying to decide whether or not to pay off her primary residence with the cash she has on hand. She has 3 Investment properties ($470k) she owns without mortgages generating $35K (not the greatest return) a year after all expenses. She has a pension of $5k a month that covers all of her expenses.

After paying off her primary residence that she paid $270K for and is now worth $380K she would still have $40K to continue investing and an additional $16K (current annual mortgage) to invest annually. She also has a HELOC of $200K with a zero balance to BRRR if the opportunity presented itself.

Her objective is to leave her husband financially secure should she pass untimely. The pension would die with her. What would be your advice?

[Theresa Harris]

Is her husband's name on all the properties?  Her better option would be to keep them paid off, he can then live off the income from those without having to worry bout mortgage payments. If he runs short of cash, he can sell the one that is making the least amount of money and use the money from the sale to hold him over for quite some time.  If she dies and there are mortgages, unless she has a life insurance policy and that debt magically disappears, he may not have the means to pay them off and he'd have to sell them.