Paying off propety early with cash flow?

[Account Closed]

Hey everyone - Here's the situation and options I'm considering.

I'm currently house hacking a SFH and cash flow about $200 positive a month. I would like to do something with that money other than let it sit in a bank account, so my thoughts are to have $100 automatically invested into an index or mutual fund each month, the other $100 will sit in the account and add to my liquid reserves (at least until I hit a certain number, at which point I'll just invest the full $200 in index/mutual funds). So the money in the index fund would still be liquid, but I can let that grow while I save up for another RE investments.

Conversely, the other option I see is using the same strategy to pay down the property. Put an extra $100 towards the mortgage each month. My initial thought would be that I see an immediate return on investment equal to my interest rate - but that wouldn't necessarily be true due to lost advantages of interest write offs. It is important to note that I pay PMI on the property, so paying down the mortgage faster would help me work towards 20% equity and rid myself of that payment and increase cash flow. $100 isn't that much though, but it adds up.

Does anyone have any thoughts on the pros/cons of the two options I'm considering? I'm leaning towards mutual/index fund because then I still have the option to use that money to pay down the property, or for another investment, although there is the risk of the market falling at a time where I need the money, but at that point I'd just hold on and wait it out anyways.

[Joe Villeneuve]

Why would you help your tenant pay off the mortgage.  If the house has positive cash flow, you're not the one paying making the mortgage payments.  Don't help the tenant do their job.

Also, let's look into that crystal ball you have and see what you are doing in 30 years.  Can't look that far?  How about 25?   No?  20?  How about 10?  At least 5?  I'd say you need a new crystal ball.