Reply to Should I Pay Off My Investment Property?

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Reply to "Should I Pay Off My Investment Property?"

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[quote=Anonymous][quote=Anonymous]Right now about allocation is as follows:

Real Estate 52%
Stocks  7.2%
Bonds  0.22%
Retirement 31.7%
529s  2.56%
Cash  6%

If we divert the money and pay off the loan, our real estate would be more like 60%.  Then cash would 3%.

I think we are diversified enough for now.  The location has been okay to rent out.  [/quote]

Hm, your real estate allocation seems high. We also have an investment property with a smallish (just under $100K) mortgage. Between that and our home equity, real estate makes up 33% of our net worth. We decided not to pay it off a few years ago and invested in the stock market instead. Since we made that choice in 2009 it worked out pretty well. If you have a long time horizon, your money should be more productive in stocks as long as you are comfortable carrying the debt. Ours doesn't worry us because both the investment property and our primary residence have significant equity and we believe they could be sold relatively quickly if the need arose. [/quote]

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