Desire to be Deft Free vs. Saving for Your First Purchase

[Nick Meister]

Hey BP guys and gals!

I've got a quandary which I'm sure many recent and not so recent college grads face. I'll quickly paint the scenario.

I graduated from university just under 1 year ago. Upon graduation, I landed a great gig working for a company here in Grand Rapids. Through a combination of saving, working through school, and a little help from my parents I came out of college with around $20k in student loans. In addition, due to a unforeseen car accident (aren't they all?) I had to take out a small auto loan to purchase a vehicle. For round numbers let's say $5k. The student loans carry an average interest rate of around 4.7%, while the auto loan is at 6.74%. I set up an automatic payment schedule that will allow me to pay down the student loans in 5 years (monthly payment of $340)  and the auto loan in 3 years (monthly payment of $175), which I think is pretty good. On top of all this, I've been living below my means and have managed to save a nice little nest egg over the past year. 

I understand the logic of investing extra money if you are able earn a higher rate of return than you are paying on your debt. Ultimately my question boils down to the fact that I could accelerate my loan pay down considerably and get myself free and clear of any encumbrances, which would be an amazing feeling! At the same time, doing so would likely mean postponing the purchase of my first rental property. I've been struggling with this for some time now. Do I continue with my current payment schedule and just live with the loans, while continuing to save (this option would likely allow me to purchase my first property in less than 12 months), or do I bump up the loan repayment, become debt free in approximately 1 year, and then start aggressively saving with an additional $515 per month ($340+$175)?

Apologies for that "quick" summation. Any comments/suggestions/advise from those that may have gone through similar circumstances would be greatly appreciated.

Thanks!!