Pay Down Philosophy

[Joel NA]

I have a question about how to handle the cash flow for two of my properties.

One is a four-plex that I'm rehabbing and will hopefully flow nicely. There is little appreciation as it's in a small town where prices are low. The other does okay cash flow-wise but sits on the very edge of a university and is already worth much more than I paid for it a few years ago. I'm able to rent it 18 months in advance.

My immediate focus is building up my reserves for each property. When I get to a comfort zone in that respect, however, I'm confused about what to do. Should I take the returns from my four-unit building and pay down the more valuable marketable property? Or is it wise to let each property "pay itself down" on it's own merit, so to speak?

I'm sure there are those who would say "stay leveraged" and keep buying properties. I agree, but I also want to get a property in the clear soon.

Thanks-- happy holidays all!