(Or have I been listening way too much to Dave Ramsey lately:) ha ha) --73.61.xx.xxx

Whoops the Title of that should have been "To leverage or not". --73.61.xx.xxx

Congrats to you. --72.24.xx.xx

Might there not still be tax advantages to some debt? Perhaps a consult with your tax pro [and examining YOUR specific profile] would be a good step in formulating a plan --74.105.xxx.xx

When I was buying homes in the Canoga Park, West Hills and Woodland Hills area of the San Fernando Valley, an earthquake hit in 1994 that took out neighborhoods nearby. On friend that invested in apartment buildings with his two brothers were wiped out because his buildings were in one area and mostly on one block. From each brother being worth 3 million back in 1994, in today's dollars that's 10 million, they only had their personal residents left -- everything else became worthless..... --47.156.xx.xx

Leverage is good for growth. If you are out of growth mode and are able to pay your existing debt off, you will be sitting in really good shape to weather pretty much any storm in the housing market. Plus you will be in position to hire management/admin/repairs and have truly passive income. I'm in favor of having paid off properties. --70.178.x.xx

I think you've got to be a tiny bit careful not to get complacent when you have vacancies though...We have two units that should have been rented months ago (years, on one of them) but because they are free and clear, their rehabs keep getting put on the back burner as other more pressing issues come up (water, snow, hurricanes, turnovers, etc.) Trouble is, we don't miss the income because they've never been rented, but shame on us! --50.82.xxx.xx

From then we were able to save like crazy because we do not pay interest. So we could buy some investment properties, tractor, barn, truck, plane etc after quickly saving for them. Slept well at night. Don't worry or get stressed about whether I can spend for an upgrade, how long it is vacant, when it is. I also know how many rentals I can manage, and want. That is the way I like to live, your mileage may vary. --96.236.xx.xx

Thoughts on the tax issues of debt... Yes, it is deductible, but if you were not paying the interest, you get to keep it. You might have to pay taxes on it, but you still get to keep more than paying on debt. As much as I hate the tax bills, even if it is half of what I make and I get to keep half, I am still ahead. Now is that half I get to keep worth the time and effort to make is another story. --96.236.xx.xx

Well what bugs me is in order to pay off my mortgages i will have to pay Uncle Sam about 250k in capital gains and recap of depreciation but in the big picture I would have less units to manage (and less income). I need to weigh pros and cons and talk to some people who have been in a similar situation. Thanks:) --174.192.x.xxx

Lots to consider. I would look at it from a time perspective. It's going to happen but when? Talk to your tax preparer and estate planning person and read some online, books, on this sight.... When not if. --99.203.x.xxx

However, the new tax law effective does have some changes the NOL carryback rule and NOL usage is partially limited to 80% so I need to revisit my entire approach to using leverage to offset taxes. --71.75.xx.xx

PETER: Why do you think you will have to pay cap gains and recapture by paying off your mortgages? They only come in to play when you sell the properties. --71.75.xx.xx

Sorry for confusion. I have 16 other units in other locations and these are the ones I am considering selling. 12 of these have my only mortgages. I really do appreciate the feedback:) --73.61.xx.xxx

If your units were all paid off today - how would it change your life today? Sure having them all free and clear is the target, but no since paying that much extra taxes so you can cash flow that much more - and pay more taxes on that money too --24.101.xxx.xxx