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re: Would you pay off a 6.5% rental?
Posted on 2/6/24 at 10:04 am to KWL85
Posted on 2/6/24 at 10:04 am to KWL85
quote:
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.
A definite hold if we decided to pay it off. It's the easiest rental we have to rent and now fully updated inside and out.
Just not wanting to eat that rent loss when they are in school is the main thing for giving me that itch to do it.
I'd probably take the 2200 each month and plunge it into the market.
1
Posted on 2/6/24 at 11:40 am to Billy Blanks
quote:
Just not wanting to eat that rent loss when they are in school is the main thing for giving me that itch to do it.
I would just pay yourself out of that cash that you're getting a savings rate. I'm all for getting out of debt, ordinarily, but I would keep "good" business debt on the books. Last thing you want is to get out of that mortgage, get the kids through, and then have to leverage it again in "who knows" what the lending environment will be.
If you have the $193k, than you have, effectively, 8 years of payments (literally 87 months, but discounted I would call it 8 or even 9 years), plus you'll make interest on the way.
I would charge (and collect) a nominal rent, too, with these kids signing a real lease. It is never too early to learn about the real world.
This post was edited on 2/6/24 at 11:43 am
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