If you’re like most investors, you’ve probably asked yourself, “Should I pay off my rental property early?” With today’s high mortgage rates, troublesome inflation, low inventory, and risky economy, many investors don’t know whether it’s the right move to pay off their mortgage, reinvest in their properties, or go out and buy more. Paying down your debt gives you a guaranteed return, but with home prices still climbing, you could miss out on the sizable appreciation of getting another rental.

On today’s show, we’re going to debate which is the best move to make. Should you pay off debt, buy more investment properties, reinvest in your portfolio, or put more money down when you buy? Each investor has a different method for their next move, but thankfully, our expert panel gives their thought processes for figuring out which decision is best for your portfolio. Henry even shares his “three buckets” framework that EVERY investor should think through BEFORE investing or paying off a property.

We’ll also discuss the crucial calculations you can use to help you decide and avoid analysis paralysis if you’re stuck between choices. Plus, how a high-risk house flipper like James protects himself from downsides even during tough markets like today. Don’t pause on making moves that could help you reach financial freedom; stick around, and we’ll show you exactly how to know which moves to make in 2024’s housing market! 

In This Episode We Cover

Whether to pay off your mortgage early, reinvest, or buy more properties

Why EVERY investor needs to calculate return on equity (ROE) on their portfolio

Is it too risky to invest today? Why James is making even more high-risk investments in 2024

The “three buckets” of your real estate portfolio that will help decide what you should do with your cash

What to do with extra money and how to make some serious passive income with private money lending

The only time when we would put a large down payment on a rental property

And So Much More!

Links from the Show

Find an Agent

Find a Lender

BiggerPockets Forums

BiggerPockets Agent

BiggerPockets Bootcamps

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Dave's BiggerPockets Profile

Dave's Instagram

Henry's BiggerPockets Profile

Henry's Instagram

James' BiggerPockets Profile

James' Instagram

Property Manager Finder

Should You Pay Off Your Mortgage Early or Invest?

BiggerPockets Real Estate 622 - ROE over ROI and Why Your “Cash Flow” Number is Deceiving

Books Mentioned in the Show

Real Estate by the Numbers by Dave Meyer

Start with Strategy by Dave Meyer

Jump to topic:

(00:00) Intro

(02:06) Too Risky to Invest?

(09:18) Pay Off Debt Instead?

(15:56) Value-Add and Reinvesting 

(23:55) Putting More Money Down

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-219

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