First reason why you pay off debt is because you reduce financial risk.

Dave Ramsey likes to say you can't get foreclosed on a house that doesn't have a mortgage.

And that's true.

The second is you get higher nominal cash flow out of a paid off property than a property that's leveraged.

The income that a property makes when it's paid off is about four to six times larger than the income that it makes if it has debt on.

The third benefit, which is my favorite, is that I believe humans need...

Welcome to the podcast, Real Estate Investing with Coach Carson.

I'm your host, Chad Carson.

You can also call me

coach. And this is a show to help you build a profitable and passive rental property business

so you can get out of the financial grind and do more of what matters. Whether you're a first

time listener or a long time listener, thank you for being back for another episode. The title of

this episode is four reasons to pay off debt on your rental properties.

Now, this is a conversation I want to have a lot more on the podcast and on my other platforms

because it's a taboo subject, almost sacrilegious in some circles of real estate investors,

to consider paying off the mortgage on any of your rental properties.

It seems like in the financial education world, you have people like Dave Ramsey who are 100% against debt. Then you have people on the other side who are fanatically about keeping debt, no matter what. My own preference falls somewhere in between. And in this episode, I want to share more of my story, my philosophy about why it's important to eventually pay off debt. For those of you early in your journey, early in your career, leverage can be a very helpful thing. So this isn't necessarily telling you to do it right away. It's nice to know where you might want to go to and when you might want to start considering taking some risk off the table, increasing your income, and having more peace of mind with your entire portfolio. My business partner and I have been doing this for several years, and it's been one of the best decisions we could have made in our real estate investing business. We're not 100% debt free. We still have some debt on our properties. We have much less before and I feel very good about where we are. So in this episode, I decided to bring on one of my good friends, Ari and Shihai. He's one of the smartest people I know. He's a real estate broker. He's a real estate investor. And what he does in his professional life is helping clients buy investment properties

and implement what he calls a blueprint strategy to build a portfolio of income properties.

You can eventually live off and have financial independence. And as you might imagine,

paying off the debt eventually is a big part of his plan as well. The reason why you might want to pay off debt is not so that you can optimize your returns,

is so that you can optimize your life.

So we're going to go back and forth, exchange some ideas.

...