Pros and Cons of Paying Off Rental Properties
Should You Pay Off Your Rental Property?
This question comes up all the time. We will go over the Pros and Cons of both strategies.
Schedule a call if you have questions https://calendly.com/damiboulder/30-minute-call-afternoon-second-opinion
We will go over the math of investing your profit vs paying the mortgage off faster. We use a rate of 5% but that rate can vary and it is used for explanation purposes. The same principles can be applied to paying off your primary residence.
Pros of Paying Off Your Rental Property
• Peace of mind
• No debt
• Income to support your lifestyle
Cons of Paying Off Your Rental Property
• Income from the property is taxed
• No debt to reduce taxes
• Cash poor
• Special assessments and “one-time expenditures”
• Missed Roth Conversion Opportunities
• Earn a better return • Tax preference investments
• Lack of diversification & flexibility
Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is registered as an investment adviser with the U.S. Securities and Exchange Commission (“SEC”) with its primary place of business in the state of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. References to registration with the SEC do not imply any endorsement or approval of the qualifications of the firm, nor do they imply that the firm’s representatives have attained a particular level of skill or training. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.
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