Home     Forum     401k     401k Rollovers     Crypto Forum
    Register   Login   Members   Search   FAQs     Recent Posts    



pre-paying investment property vs saving cash

Reply to topic
Money Talk > Real Estate

Author Thread
simpleguy
New Member


Cash: $ 1.55

Posts: 7
Joined: 17 May 2012
Location: Atlanta, GA
pre-paying investment property vs saving cash  Reply with quote  

Does it make sense to pay off investment property early instead of saving that money for down payment to buy another property? What tax benefits would I lose/gain by paying off investment property early?
Post Tue Apr 16, 2013 9:57 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 751.85

Posts: 3656
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
Does it make sense to pay off investment property early instead of saving that money for down payment to buy another property?


It almost never makes sense to prepay a property - the US mortgage market provides some of the least expensive capital in the world, all or the other 191 nations have 10 yr reset limits, restrictions, etc, the US is the only place whereanyone can go to a bank, borrow $100,000"s at <6%/yr, fixed rate, for 30 yrs.

Borrow "low, long" capital, keep it for the full term, and invest it elsewhere. Eg, borrow an extra $50k (pay $300/m, ie $108,000). Put the $50k into an 11%/yr index for 30 yrs = $1,150,000.

But don't borrow for tax benefits, it never makes sense to pay $10,000 in interest to get a $1500 tax break, that is an $8500 loss. (I hear folks say that they keep the mortgage for the tax break - but not invest the money - yipe - lol, our Tax Code causes a lot of people to do irrational things.)
Post Tue Apr 16, 2013 11:57 pm
 View user's profile Send private message
Deen888
Senior Member


Cash: $ 41.60

Posts: 203
Joined: 14 Feb 2018
Location: Los Angeles
 Reply with quote  

Property investment is always very risky, meanwhile cash will never lose its value. By the way, if you're looking for a reliable money transfering company, have a look at Xoom. If you're hesitating and don't want to take a risk with unknown service, then consider these xoom reviews xoom.pissedconsumer.com .
Post Tue Oct 05, 2021 10:15 am
 View user's profile Send private message
vaduvala
Senior Member


Cash: $ 130.10

Posts: 665
Joined: 27 Feb 2018

 Reply with quote  

One of the most apparent reasons for paying off your investment property is increasing your cash flow. Without having to pay a monthly mortgage from the money you get from renting it out, you can definitely save more to pay off your residential property next or invest in another property. Compared to high-interest loans, mortgage interest on a rental property loan is fully tax deductible. For some investors in upper income brackets, the tax benefit of writing off the interest expense to reduce taxable income may be more important than paying off a rental property loan. Paying off your mortgage early can be a wise financial move. You'll have more cash to play with each month once you're no longer making payments, and you'll save money in interest. You may be better off focusing on other debt or investing the money instead.

what is a telecom technician? - Fieldengineer
Post Wed Jan 19, 2022 7:52 am
 View user's profile Send private message Visit poster's website

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      


Money Talk © 2003-2022

Crypto Prices