- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Would you pay off a 6.5% rental?
Posted on 2/5/24 at 2:45 pm
Posted on 2/5/24 at 2:45 pm
I'm in a position after selling a rental I don't like to take those proceeds and either keep the cash or pay off a rental I do like.
It rents for $2200 a month.
193k balance.
My other rentals are in the 4's and not considering those in terms of paydown.
Other item is it's likely the home my kids will live in while in college. (So ideally wanting a place without a mortgage) since I wouldn't be getting market rent with them there.
It rents for $2200 a month.
193k balance.
My other rentals are in the 4's and not considering those in terms of paydown.
Other item is it's likely the home my kids will live in while in college. (So ideally wanting a place without a mortgage) since I wouldn't be getting market rent with them there.
This post was edited on 2/5/24 at 3:29 pm
4
Posted on 2/5/24 at 3:09 pm to Billy Blanks
I'm confused... Are you asking if you should pay off a rental that has a 6.5% interest rate?? A few questions you should ask yourself:
1. On my other rentals, do I have any loans that are coming due and potentially the monthly payment will increase?
2. Do I have any other rentals where the lump sum that I received will payoff any other loan thus creating a snowball affect(effect?) to be able to pay off all loans faster?
3. Do I have any deferred maintenance that needs to be taken care of and possibly increase the rent of another rental?
1. On my other rentals, do I have any loans that are coming due and potentially the monthly payment will increase?
2. Do I have any other rentals where the lump sum that I received will payoff any other loan thus creating a snowball affect(effect?) to be able to pay off all loans faster?
3. Do I have any deferred maintenance that needs to be taken care of and possibly increase the rent of another rental?
This post was edited on 2/5/24 at 3:11 pm
Posted on 2/5/24 at 3:33 pm to Billy Blanks
Without knowing every single detail, I have to go with my gut which is that above around 5-6% is when I would personally rather payoff a mortgage instead of holding cash/investing.
So IMO yes - sell the rental you don't like, pay off the 6.5% rental you do like that your kids will live in someday. Just the overall peace of mind from this move simplifying things would for me be worth it. Factoring in the 6.5% is just icing on the cake.
So IMO yes - sell the rental you don't like, pay off the 6.5% rental you do like that your kids will live in someday. Just the overall peace of mind from this move simplifying things would for me be worth it. Factoring in the 6.5% is just icing on the cake.
Posted on 2/6/24 at 6:52 am to Billy Blanks
I would probably just stay solvent. You can mitigate your 6.5% by parking in a 4% to 5% savings or even 30-day CDs rolled over.
If an investment is funding its own debt service and there is no real money to be squeezed out of that, I would just let it ride. Obviously, if it was 9 or 10, I might think differently.
I mean, $200k cash can reliably bring home over $700 a month in a cash account in the current savings rate environment.
(ETA: You can draw that down while your kids live there, I suppose, but if the asset is staying in the portfolio and go back into service as a revenue generator after the kids are done, I would just keep that note until the end.)
If an investment is funding its own debt service and there is no real money to be squeezed out of that, I would just let it ride. Obviously, if it was 9 or 10, I might think differently.
I mean, $200k cash can reliably bring home over $700 a month in a cash account in the current savings rate environment.
(ETA: You can draw that down while your kids live there, I suppose, but if the asset is staying in the portfolio and go back into service as a revenue generator after the kids are done, I would just keep that note until the end.)
This post was edited on 2/6/24 at 6:56 am
Posted on 2/6/24 at 9:26 am to Billy Blanks
Right in the borderline range. Some of it depends on what you will do with the proceeds.
I was in a similar position a few years back. The rates were different but similar spread. I used the money to buy a small lakehouse. We used it for both personal use and rented it on Airbnb. We are currently selling that property for a huge gain.
I was in a similar position a few years back. The rates were different but similar spread. I used the money to buy a small lakehouse. We used it for both personal use and rented it on Airbnb. We are currently selling that property for a huge gain.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News