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Updated about 16 hours ago,
Should I Pay Off My VA Loan Quickly or Keep Leveraging Debt?
Context:
I’m seeking advice from those experienced in real estate investing and financial freedom strategies.
I recently bought a multi-family property in Newport, RI, using my VA loan for $695K. I'm no longer house hacking, and all three units are rented out, generating a total of $8,200/month in rental income. My monthly payments (mortgage, insurance, taxes) are roughly $3,600, leaving me netting about $4,600/month.
I have four years left until military retirement, after which I’ll have a pension, some disability income, and rental income from this property. This setup alone feels like a solid foundation for financial freedom.
Here’s my dilemma:
While I understand that my mortgage interest rate is very low (2.8%) and there are tax benefits to carrying the debt, I’m wondering if it might make more sense to aggressively pay off the loan. If I pay it off, I could maximize cash flow earlier, reducing financial stress and allowing me to focus on other ventures or simply enjoy life more.
On the other hand, I know some people advocate for keeping cheap debt and using the extra cash to invest elsewhere for potentially higher returns.
Why I’m leaning toward paying it off:
Security: No debt = peace of mind.
Financial freedom earlier: A fully paid-off rental would give me a significant monthly cash flow?
Retirement simplicity: Fewer financial obligations as I transition out of the military.
Questions for the group:
1. Is it worth keeping this debt for the tax benefits and low interest rate, or would you focus on paying it off ASAP?
2. Are there better ways to leverage this property or extra cash flow to accelerate financial freedom?
3. Has anyone here retired debt-free, and how has that impacted your life versus maintaining debt for investing
Looking forward to hearing your thoughts and experiences!