#455: Ask Paula: I’m Recently Retired. Do I Pay Off My Rentals Or Buy More Real Estate?

Photo of Paula Pant with chairs behind herYvette recently retired with the goal of reaching a $10,000 monthly income from her real estate investments. Should she put her money toward debt payoff or portfolio expansion?

Carly wants to buy a second home and convert her current home to a rental. What are the pros and cons of tapping into existing equity versus saving cash for a down payment?

An anonymous caller plans to move back to her touristy hometown in six to seven years. Is it smart to buy something now and take advantage of a thriving Airbnb market?

I tackle these three questions in today’s episode.


P.S. Got a question? Leave it here.


Here are the details:

Yvette asks (at 01:17 minutes): I’m 51 years old and recently retired from my job after 12 years. I’ll receive $1.6 million over the next three years.

I quit my job because real estate is where my passion lies.

I own four properties with total mortgages of $513,000. One of them is my primary residence and the other three are rental properties.

Should I pay off my mortgages or should I use the money I have to invest in more rental properties?

I already invest in the stock market and I’m looking to further diversify my portfolio. My goal is to make $10,000 or more in rental income every month.

Anonymous asks (at 21:12 minutes): My boyfriend and I want to move back to my hometown in six to seven years, possibly sooner.

Is it better to buy property when we’re ready to move, or buy now and rent it out in the meantime?

We have 10 percent saved that we could put down as early as this year.

My hometown attracts many tourists and hotels are very expensive, so I don’t think we’d have difficulties renting it out. We already spend a lot of time there and have plenty of people that could help manage it.

We’re 29 years old and we’ll be making $300,000 combined.

We max out our Roth IRAs and my TSP. He contributes to his deferred compensation and will receive a substantial pension in retirement.

We bought our current home in 2022. Our mortgage is under his name but we’re both on the title. We’re thinking of putting the second mortgage under my name and having us both on the title as well.

Carly asks (at 41:44 minutes): I’d like to buy a second home and convert my current primary residence into a rental. What’s the best way to finance that?

The value of my townhouse has increased by $100,000 since I bought it three years ago.

Should I tap into one-fifth of that equity, in addition to 5 percent cash from savings, to put down on my new home?

Or is it better to leave the equity alone and wait longer to save a bigger down payment? I’m eligible for an FHA loan that would allow me to put as little as three-and-a-half percent down, but I’d like to be closer to 10 percent.

I’m self-employed and had to get a special business loan for the home I have now. To qualify, I showed one year of business tax returns and put 10 percent down.


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