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[quote=Anonymous][quote=Anonymous]I'm a big fan of Dave Ramsey and his no-debt perspective, but I also know that debt (in terms of mortgages) got us to the position we're in today. We own 5 rental properties in DC. Together they make about 20K/month gross - then we pay $13,500 to mortgages and another $1,600 to the property manager. The rest is earmarked for vacancies, repairs, home improvements, and taxes. That "rest" is starting to build up in the account, which is good. Slow and steady.

I'm a little torn between starting to pay the properties off one by one, until all are mortgage-free (which would happen in 14 years anyway if we paid no extra) or gathering up enough for another down payment and adding to our portfolio.

We will be moving back to DC in a year for work (for one year) and then on the road again - we could scratch up enough for a down payment and would qualify for a mortgage since it would be a primary residence. Then when we move in a year, we'd make it another rental. Of course, we would make sure that the rents we could expect would more than pay the mortgage, as we did on the other houses. We have been landlords (until we had to hire the property manager a year ago when we posted overseas) for 11 years and feel pretty confident in our ability to manage well, take care of our tenants, and run a good business. We have the knowledge and experience, and know what to expect. Seems silly to not do it again.

That said, the though of paying them off is really calling to me.

What would you do?[/quote]

What is the total value of the properties?  What is your rate of return?  If it is over 10% after expenses, you are doing phenomenal.  Compare to the rest of your portfolio--stocks, bonds, etc.  Unless your real estate returns are doing great, and this is your specialty as an investor, I would advise you to diversify.

Also, what kind of mortgages do you have?  Any ARM's?  If so, given the uncertainly in the coming years, I would advise you to pay them off before the rates potentially skyrocket.  If you have a 30-year fixed at 3.5%, making excellent returns, and real estate is not disproportionate in your portfolio, then by all means, go buy some more.

But isn't long distance management a major pain?  Who wants to hire and pay a plumber when you are miles away?[/quote]

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