Paying Down Your Rental Investment Mortgage

by Lynn Jefferson
(Kanata, ontario)

Good day, I am new at investing in real estate. Have one rental so far with good positive cash flow.

In the process of purchasing another.

I have heard two sides of paying off the investment mortgage.

What is your take on this?

Should you be paying down that rental mortgage using the extra cash or not?

Thanks and have a great day!


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May 20, 2011
RE: Paying down your rental investment mortgage
by: Tom Karadza

Hi Lynn,

Thanks for your question! It's a tough one.

Because the interest on the mortgage is a tax deductible expense we're typically very comfortable in not paying off the mortgage. In fact, we've even "re-amortized" in the past to make our payments lower, increasing our total interest costs and using the cash flow to fix up the property or re-invest elsewhere.

In very rare circumstances would we pay down the mortgage.

Hope that helps a bit!

May 08, 2011
Use a portion
by: Mark

Depending on your situation I think keeping 50% of the cash flow should work. Paying back into your debts and growing equity goes a long way.

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