Second Mortgage to buy Rental PropertyA second mortgage for the purchase of rental properties
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Shall I repay my mortgage or buy a rental property?
The first 8 years during my property investment trip - I didn't do that because I wanted to resize and buy more property. When you want to have a peaceful mindset where you want to decrease your indebtedness rate (lower your risks) because you alternated career and take greater chances in your lifetime other than property, then you might want to speed up your rental property mortgage repayments.
3 ) Or if in the near term you want to "retire early" or take a few pauses in your lives and reap the rewards of your hardworking work, speed up the mortgage payment so you can increase your rental payment flow and handle the rental payment flow INLIVELY. Financially, it is much better to spend your cash with higher yields than to pay a mortgage with 3% interest on it.
If, for example, you can even get 8% returns from shares or rental property with your own funds, then you have already profited from the investments instead of repaying your mortgage! For my part, I have decided to postpone the repayment of my mortgage for the "speed of money"....... More than 10 years later, I sell a few of my properties in order to get my own mortgage off -> but most of the time the money isn't my own.... but rather, the other rental properties to which I was collecting did well over the years (because they appraised and lessees payed down the mortgage...) so it created a cute nesting place to get my mortgage off.
If you want a peaceful mindset, then you will first repay your mortgage then plough off your investment... but you will loose out financially. What is more, you will not be able to afford your mortgage. A different strategy that bypasses in the center I have some buddies who do is letting out a cellar suite to speed mortgage payment. So, you are living substantially inexpensively, with another will help you on mortgage repayments, and you can either elect to put your cash aside or increase the mortgage payment.
But they chose to speed up mortgage payment even though it doesn't make financial sense... precisely because it was helping them get a good night's rest.