I own Rental properties; continue to max out IRA/401K?

[Jason Hokaj]

Hello, I'm 47 and I'm almost 2 years into my REI journey - which was initially funded thru savings. My goal is to use REI for passive income for retirement. I currently own 5 properties; all but one are cashflowing (the other is vacant and going thru a rehab/remodel - which I'll need to dip more into savings to cover). I also max out my ROTH IRA contributions, as well as what I have for a version of 401K for my wife and I.

What tools / resources would you recommend to help me in the decision to continue to invest as I have - letting the REI support itself and max out IRA/401K, or stop those IRA/401K contributions and use them for 1 of 2 things (or both): 1. Pay down mortgages faster 2. Build cash reserves faster for continued REI investing.

Thank you!   

[Greg Scott]

I would vote for #2.

With real estate, I can get much better returns with much less risk and much less volatility than stocks can provide.  The 401K lovers out there should know that real estate can be more tax-favored than a 401K.  As a real estate professional, I haven't paid any federal income tax in two years and my income is higher than ever.

Paying your mortgages down quickly just saves you interest costs, which means you are making a 3-5% return on your money.  Those are terrible returns.