QUOTE (invst4profit @ Jul 25 2008, 06:37 AM) As a investor you look at the interest payments as a tax deduction and since the tenant is paying your mortgage not you there is really no reason to pay it down. Invest the extra money elsewhere and generate more income.
Your business goal should be to generate income and do everything to that end. When your mortgage gets payed down naturally or the value of the property increases it is best to re-mortgage and pull money out (more income) assuming the property still has positive cash flow.
Amen to that !
The bank is the biggest beneficiary in a mortgage paydown as it reduces their risk .. if you fail to pay they can foreclose and have more equity !
If your goal is financial freedom, you need to increase the amount of cash-flowing real estate owned .. and to do that you need cash to buy more assets .. from your own pockets or other people .. and as such paying down a mortgage reduces your cash in your pocket and lowers your ability to buy more assets.
of course, you should be mindful of real estate cycles, reserves and the ability to hold LONG TERM (say 10 years plus) as true wealth is not build by speculative flips or owing one asset mortgage free .. but MANY assets that all break even or cash flow on a monthly basis .. as the equity increases every month even if the market is totally flat !
See more on making money even in a flat market:
Making Money in a flat market
and also "what is better: LOC or mortgage" here:
LOC or Mortgage
and on real inflation vs. published price increases, proving that in the long term you will always have 3-5% annual upside, on average:
Real Inflation vs. Published Government Lies