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Updated almost 7 years ago,
High income earner with rental properties, pay off mortgage(s)?
My AGI is over 400K and am ~10 yrs from retirement
Bought a home 2 yrs ago, which is currently with 400k loan at 3.75% for 30 yrs and second loan as a line of credit with 122k at 6.24
Have two rentals bought about 9 and 7 yrs ago. Both were brand new at purchase. Both have currently a ~120k balance at 5.8% on 30yr fixed loans. One rental generates over $200 a month and is valued ~80K above purchase price. Second home rent is barely breaking even and home value is nearly same as when bought.
Have cash and vested stock and I am wondering if it is better from a tax and overall financial perspective to pay off the line of credit vs paying off one of the less advantageous rentals? Or should I try selling the second home as it is not very cash flow positive? Or should I keep the cash to purchase more rentals when the next correction hits?