Why not pay off a piece of property?

[Henry Hodges]

When listening to the recent podcast (episode 263) with Bruce Petersen, Bruce mentioned that you should never try to pay off a loan on a property.  He is mainly involved in much larger scale things than most people are, but I cannot understand why you wouldn't want to pay it off sooner than later, other than I have heard people say that you could be using your money else where.  How would it differ depending on the size/price of the property?  Does any one have any insight on this?

Thanks!

[Andrew Johnson]

@Henry Hodges First off, @Caleb Heimsoth is right on the money that most people want to play "interest rate vs. ROI arbitrage". As long as you can stomach a downturn, have cash reserves, etc. it's a smart play. For me the biggest advantage is that mortgage interest is still a tax deduction. I don't really want "free and clear" properties because then I'm just paying the gov't a portion of the profit. For the most part, depreciation isn't going to offset you net income entirely. So if I can get a tax benefit and I can play some form of ROI arbitrage then I'm doubly ahead of the game.

That said, I'm not a believer it "max out debt and leverage as much as humanly possible!" because there will be some rainy day.  It won't be today, it might not be next year, but someday it will come.