Debt elimination a good idea?

[Geoffrey S.]

I purchased all of my properties on 30 year fixed mortgages (no pre-pay penalty).  I've read in many places in the BP forums and elsewhere that I should now aggressively attack the debt I carry with prepayments (debt snowball is commonly recommended).

The idea of owning my properties free and clear appeals to me (I don't like making mortgage payments, especially the interest portion thereof).  However, when I run the numbers, it works out to a mediocre return on my investment.  

I carry an average $55K balance on my places and pay an average $320 in p+i each month.  

Paying $55K to save $320 a month makes ~ 7%. ($320 per month x 12 months) = $3840 savings per year / $55,000 investment = .0698.  Besides, I'll lose the tax write-off of mortgage interest.

I can beat that over time in the stock market.  Wouldn't it make more sense to take all money I can from rental income and just put it in the S&P500, or reinvest elsewhere leveraged?  I keep a cash cushion that (I think) is adequate for emergencies.  The voice in my head tells me "when you disagree with the majority of people, you're usually missing something"...

[William Jenkins]

@Geoffrey S. Most on here will tell you to leverage to the hilt. That mentality has worked well for the last 8 years or so but like all good things that will come to an end at some point. I don’t see the issue with debt pay down at all. I do think it would be wise however to make sure you have credit lines available for future use If necessary. When blood is in the water financing his MUCH harder to come by.