Keep My Rental Or Sell It To Pay Off My House?

[@Mao2187]

Never leave the show Dave. They can never replace you.

[@Nolaman70]

Keep it, good rental properties are not easy to get now.

[@KyleRountree]

Good rentals are too hard to come by right now. If it's a good property keep it. Your income is high enough to knock this out quickly

[@lionheart93]

agree

[@Evil-Rod-Farva]

Facts. Not sure where Dave thinks deals are easy to find, but unless you have folks working for you searching them out, it isn’t happening for a mom and pop.

[@reese85]

@@Evil-Rod-Farva what? Dave told him to keep it

[@stevenporter863]

Agree. What is the rush to finish paying off the house? With that income it should not be a concern since the house can be paid off quickly anyway.

[@joeforestandi478]

Deals are coming in the next 12 to 18 months. Values are stupid high now. Investors are going to dump property left and right.

[@itsmikac8777]

Keep the rental! You have a high enough income. It’s really hard to find a cash flowing rental.

[@patki32828]

Good real estate investments are hard to come by. You are envied secretly by most for owning it. Sweat out the remaining time. You won't regret it.

[@genxx2724]

Why would you sell a good rental, only to buy another one later? It will cost a lot more money and the property tax will be a lot higher.

[@THEBIGGESTSCUMBAG]

UNLESS U 10-31 EXCHANGE IT

[@genxx2724]

@@THEBIGGESTSCUMBAG Troll.

[@EvergreenVB]

@@THEBIGGESTSCUMBAG I don't think you understand what the 1031 exchange entails. It defers the capital gains tax from the sale of the property, but it does not and cannot change the property tax on the replacement. The equity is also held until the purchase of the replacement property which completely voids his plan to pay off the mortgage on his primary residence.

[@MobileVisions]

Yeah I’d lean towards 1031…. Unless that 800k house mortgage is killing him,. His tax bracket at 190k puts him into a whole new tax strategy that 95% will not ever meet to think about.

[@David-wo9un]

The best Ramsey duo; I like seeing videos where Rachel and Dave discuss these situations; always educational and entertaining.

[@genxx2724]

Rachel knows nothing. She would have followed the template of “sell everything, pay off the house, and pay cash for a cheaper rental years from now.” Dumb advice for people who can’t walk and chew gum at the same time.

[@lkj0822g]

I'm with Rachel in that I fully expected anti-debt Dave to tell this caller to sell the property. A good investment property is building you equity each and every time you deposit that rental check. A bad investment property will make you hate mankind (and dogs and cats). "Do you like the property and would you buy it again" is a pretty good benchmark in the decision process. Even if this caller's timeline exceeded five years, I would have kept the property and let it continue to build equity. Even Dave admits "in ten years, you're going to be at the same place", so why get rid of it?

[@Weakeyedominant]

In this case the caller can afford both the mortgage and the rent if his tennant doesn't pay. The tax from selling the rental doesn't make it worth selling. If he still owed 50% on his mortgage he would have been better selling so that he is not over leveraged if the tennant stops paying.

[@Lehpurdzzz]

Why ever pay off the house when you can cashflow on another property and net more money, while benefiting from both properties increasing in value?

[@kpdkchristian2570]

If you do this too much with too much leverage, a crash can wipe you out, which is exactly what happened in 2008.

[@TheFlyingZulu]

What KPDK said and also because if you can't pay off your house or the rental mortgage in under 5-10 years as Dave was suggesting there is risk involved with "borrowing money" and being in debt to make money. Paying off debt and eliminating the interest you're paying is controllable and expected risk. Owning a rental property can have uncontrollable and unexpected risk so thus you may not "net more money" as you mentioned. Being in debt AND having a negative net cash flow on a rental could be really really bad.

[@peoplearecrazy1798]

Rachel is the best compliment to Dave.

[@queen.kristal8395]

I mean that’s his daughter

[@aaront936]

Don't sell cash producing assets to pay off low interest mortgage debt.

[@brandonroberts5058]

on the flip side: paid off low interest mortgage frees up the monthly expense.

[@119Agent]

That is not inline with Dave's philosophy. Debt is risk. Eliminate the risk first.

[@Dave-tz9zx]

It is nice to see Dave evolving...it isn't just about getting debt free all the time. One needs to look at the whole picture.

[@jimmymcgill6778]

Keep it. Only sell if you are making no money on it.

[@alinatamashevich3354]

Jimmy, depends on how much Tylenol he wants to take everyday.

[@bellmattwebb]

You're going to have more income keeping your rental, period. Dave actually going against his normal course. Good choice 👌

[@TheDjcarter1966]

Two reasons Dave say this is OK...the timeline doesn't really change. But biggest reason is equity in the property, if his income disappeared and renters moved out tomorrow, he could sell both properties and have a couple hundred thousand dollars in hand in a month or two and start all over and be fine.

[@beaco2706]

"You see how I'm analyzing that right?" "Yes, I do!" "Ok, cool." *hangs up*

[@andrewwhitcomb4857]

Wow I really didn't expect Dave to come to this conclusion, but I appreciate it.

[@tomgradel4999]

My solution (and what I did) was to take a second mortgage on the rental and pay off my home with the money. The extra interest on the rental was a welcome tax deduction that was not subject to the standard deduction threshold. In my case I could then begin taking the standard deduction rather than itemizing AND i had greater expenses on the rental by "artificially" reducing rental net income. Dave should be OK with this because it isn't increasing debt -- only moving it around.

[@NoRegertsHere]

This doesn’t work in every country. In Australia for example, the ATO doesn’t like this if you were audited.

[@tomgradel4999]

@@NoRegertsHere It's interesting that the ATO has problems with the strategy. I double-checked with the US IRS when I did it, and they said it was OK. The rationale is that I'm removing equity from the property early, before sale, and I am able to anything I want with that money.

[@NoRegertsHere]

@@tomgradel4999 it’s called cash pollution, or similar. What you use the money for is what makes it tax deductible or not. There are different loan structures that can do this accidentally too. Redraw loans instead of offsets. Many banks and mortgage brokers don’t offer tax advice and often aren’t aware it’s a thing and will save you money by creating a redraw facility (few hundred saved). But an offset loan is what the ATO likes, because they can see what the savings are and it keeps them separate from the tax deductible loan, just offset the interest.

[@tomgradel4999]

@@NoRegertsHere Thanks for the information on offset and redraw loans. I hadn't heard about these options before. I still don't known why ATO would care about how money is used from a second mortgage. If I put less money down for the purchase of a property, the increased interest would still be tax deductible and it wouldn't matter if I used the "excess money" for personal reasons.

[@noahjenks2012]

She be calling Dave out! 😂😂😂

[@marcodm]

Keep it, pay it, enjoy roi.

[@119Agent]

I'm in a slightly similar position except I still have 24 years left on my the mortgage of my home (or 9 based on how I'm currently paying down principal). Selling the rental property would get me debt free quicker but both my mortgage is only 12% of my income. It is really hard to throw that second source of income and investment away.

[@Jim_Curtis]

Another option he could consider is sell his house and use the equity to buy another house outright.

[@jillgott6567]

Pay off the house ! A friend of mine put up her paid off house as collateral for a rental property. The entire time she had it I was afraid for her , she never understood why. She had alot of problems with the rental that caused her to spend alot of money. But in the end it was sold and the loan repaid.

[@mosesaltair3893]

Paying full price for an investment property doesnt make financial sense. The rate at which homes appreciate isnt enough to justify it without leverage. Leverage is why RE can be a great investment.

[@joelack4925]

Seems like the one thing that isn’t being considered is the equity gain in the rental property by keeping it and paying it off versus waiting for five years to buy a new one and starting at the beginning of equity. Keeping them both and paying them off over the next 4 to 5 years seems like the no-brainer to me.

[@MobileVisions]

Capital gains taxes vs 1031 (sell 1 to buy 3 and no taxes)…. Roll the net profit into 2-3 Then let net rental cash flow help pay off house. If you sell you will probably pay a ton on long term capital gains if taking as a profit to pay off your house. Talk to a CPA, unless you have a big tax write off based on your W2 that profit could get heavily taxed. Hate to net 150k to pay 30-35% tax

[@SENFU-y9y]

One thing I like about the Ramsey method to real estate investment is that it gives you peace of mind. I HATE having debt. The thought of losing my primary income and having to dip into my savings sickens me

[@CamiloMoynelo-Coll]

Even though I agree with Dave's decision, this video tells me that even Dave Ramsey can do tiny adjustments to the Baby steps.

[@evalina98000]

If this was like who wants 2 b a millionaire or sum game show, I would have lost 😂....u learn sumthing new everyday 👍🏽 Rachel's expressions are hilarious 🤣

[@chriskim2770]

Wow~ never expected that answer. He cleared my situation cos I’m in the same boat. Thanks again Dave. Love and respect your clear paths and wisdom

[@md-wg4bz]

He threw me for a loop too, I was waiting for him to say sell the rental property. 😳

[@reesercliff]

because his income is so high no reason for him to sell off his rental that's generating passive income

[@robertschroeter9358]

So did I make a mistake selling our rental? I was getting 2500 per month in rent for our duplex but paying almost the same amount in loan payments against it. That’s not counting property tax and other upkeep costs. Part of me regrets selling it for it was a really nice place. But did pay off a significant portion of our debts.

[@alwayswinning3743]

If you get into debt any kind of debt, find the best way possible to get out of debt ... I'm living in Syd Aus ... Not going to buy a home, that will keep me in debt rest of my life I'm 39 ... No chance. I believe in staying out of debt unless it's for a Car or House/Unit - Unless you can pay it off cash Or pay off quickly don't get into any kind of debt... House/Unit Is good eventually price goes up, Car is good gets you to work and to point A-B ... Just don't go into debt out side of your price range - It's where most people stuff up

[@juangonzalez4376]

Another Genius master class by Dave

[@_Philip_.]

I was interested in how much the rental makes him

[@robertgray320]

Could be just me, but if you make $190k annually why wouldn't you just pay the mortgage on your house off in a year? Or are we living above our means now?

[@domferris9963]

Because in the long run if he pays off the mortgage early he’s losing out on potential gains. He has a good equity position, he can cash out in an emergency if he really needs the money. He’s not living above his means, he’s using the banks money to amplify the rate of return on his investment property.

[@jaredflurry937]

His advice is pretty meaningless for someone earning more than ~$120k/year (in the southern areas that his show is most popular). People earning that much have so many options available to them that they can base their decision on preference rather than numbers. In this caller’s case, the smartest “numbers” move is to refinance the rental (thereby maximizing the tax shelter it provides) and use the money for other tax-advantaged investments. Paying off his house is just for bragging rights; he has no risk of losing it. The anti-debt advice is for folks earning $50k and serves as a risk reduction tool. If that risk doesn’t exist, the tool doesn’t need to be used.

[@jayc4715]

Exactly...plus the rental income...he could probably pay his mortgage off in 8 months

[@lionheart93]

Would you be able to Airbnb your rental? Is it in salt lake city because u can make big bucks if so??

[@maxlasater]

thanks for the car loan idea. it will take longer than 18 months but im good at mutiplying money.

[@swackhammer2139]

Dave has been very consistent on investment real estate property. He's ok with debt on income generating and appreciating assets. Just as long as it doesn't become a boat anchor keeping you from building net worth.

[@Chromewarrior]

Glad he said the “K” 🤣

[@melissaward5910]

Question …I own a property..I’ve recently moved from.. I currently pay on a mortgage ..I could rent the property and let it pay for itself..mortgage +..with a little profit..or sell and take the $$ and run…I would only make about $ 100a month after tax and insurance for rental property..plus the aggravation of tenants….what are tour suggestions??…I know perpetual income is good but questioning sell / keep…1150 sqft cottage..can you advise me

[@blakerich134]

i just dont understand the 100% equity thing... it seems like such a wasteful opportunity, unless your income is just millions you need to leverage debt to make any kinds of money in this world

[@pat-orl]

Daughter learning on the job

[@jasonjd916]

I had own the rental property more than 5 years and rent it out about 4 years now I'am selling it to pay my off my primary property mortgage. Do I have too pay the capital gain if any on that rental property I about to sell?

[@mambofuego5101]

Rental income equals peace.

[@reese85]

Lol not necessarily

[@blackworldtraveler3711]

@@reese85 It is when you do due diligence,pay cash,and not greedy.

[@reese85]

@@blackworldtraveler3711 ppl behaviors always change! No matter how due diligence you do and depending on the rental! I wouldn’t pay cash

[@blackworldtraveler3711]

@@reese85 Yeah I can see behavior change if doing this while married but that's not me. I paid cash for my rentals,did due diligence,and was not greedy. Can't complain. My behavior changed.....retired debt free at 49 in 2020. Do what I want when I want now.

[@reese85]

@@blackworldtraveler3711 what? Behavior change in your tenants and yeah! You can prob pay cash for a single fam home but the real money in multiple family units and paying cash is not always the best! Cuz you may not have the cash at hand but the leverage and make more money!

[@JAYCEE-xm5dd]

Funny Rachel is the only one that can challenge or question Dave without the worry of being fired. 😂 All the other cohosts are yes n amen to everything no questions asked. 😂😂😂

[@awesomehigames]

You see the one where the guy wanted to order a new vehicle and Dave told him to buy a more expensive used vehicle because "no new vehicles until you're a millionaire"?

[@jamesathome5167]

Lol , I tonight Dave will said sell it pay all your debt

[@adamseidel9780]

Selling it and forgoing the income if you don’t dislike having the property would be an awful, money losing idea.

[@LuisSanchez-xc9ih]

This guy sounds like the life insurance agent that called to debate Dave about whole life vs term🤔

[@Azel247]

Before watching the video, I'm going to predict selling to pay off house. The freedom of not having a mortgage payment and not dealing with a tenant is amazing.

[@reese85]

You should prob watch the vid

[@midkort]

@@reese85 For real. Lol

[@stevencole7331]

He likes the rental property because he has responsible renters . Hopefully that continues but the law of averages may catch up . Dave having multiple rentals can absorb bad ones and I am sure he has had some but when you only have one you are at risk . Kind of like putting all your retirement in one stock instead of dreading out your risk with many . I think the guys age plays a factor here also . As we age less risk is more appropriate .

[@depaduser1]

I don’t understand why he was even thinking about selling the rental property 🤔 especially if it was paying for itself from the tenants… it would be understandable if he was having a hard time renting it out and it was draining his pockets but it not lol

[@laurieannmete2991]

Diversifying? Should i sell 1 rental to pay off another rental. Approaching 60 yrs old?

[@kylec4509]

Sell it!

[@reese85]

Why?

[@tkdevlop]

No brokie

[@kylec4509]

@@reese85 I feel like he can get out of debt immediately with some extra cash, then start aggressively saving more cash to buy a rental property with cash. Then repeat the process a little faster on the next one. It compounds quickly after the first two or theee

[@sunkissed6220]

Esp if major repair expenses are on the horizon like replacing the roof 😬

[@Kaktus965]

@@kylec4509 How many do u have?

[@karinacepeda4073]

He is creating wealth with his investment property! He has gains with inflation, depreciation and equity build up. Don’t sell your investment property!! Pay your house faster if you can !!

[@gamewidben]

And this lady doesn't work at the Ramsey show anymore looool

[@blakegarritson1056]

Sale your rental!! Sale to a family!! Let's start getting America back on track.... everyone buying rentals just for extra money is the main reason why homes are so expensive!!

[@Nolaman70]

That's not exactly true. House prices are expensive because of supply, demand and low interest rates. Investors aren't the main reason.

[@blakegarritson1056]

@@Nolaman70 that's why I said sale to a family 👪 we need to block all investors, flippers... and Dave!

[@crzyruskie86]

Private equity firms are buying all the supply of single family homes. What you said is true about supply and demand but thr supply is being eaten up by BIG investment companies and not families. So what the other person said is something to think about as well. I dont mind mom and pop investors but these corporate firms eating the home supply and the states not building enough are a double wammy that doesnt sit right with me either.

[@jillanglemyer3168]

What a crazy thing, trying to make money? What do you do for others?

[@edwardmcelligott8498]

Who wants to be a landlord when you have no need for extra income. Sell rental pay off house frees up cash and time

[@oscarcaballero8692]

And then what own depreciating currency loosing 20 percent per year no thanks

[@SebsCards]

Time and peace is an asset which can't be priced by money. Also, if you have extra money after paying off all debt, you can make money in stress free mutual funds.

[@ChaseBauer65]

Your fastest way to build wealth is to buy rental properties and leverage as much as you can safely and let tenants pay off the mortgages. And just ride the wave of property value that goes up over time. If you're paying straight cash it's a very slow process. Never pay off real estate early. 30 year loans.

[@kevinkidneyy]

dave is wishie washie on this answers , they change all the time thats why rachel was surprised

[@WhoDevv]

Because not every question gets the same answer. Selling the house wouldn’t make sense in this situation

[@NoRegertsHere]

Every situation is deferent

[@OTOWN2STOCKTOWN]

Is it just me or are the topics about people having too much money and dont know what to do with it, and no real world problems?

[@NoRegertsHere]

No. Still the baby steps

[@dustinj7963]

He was on the verge of giving the worst advice this show has ever seen!!!!

[@rdbeaz]

Keeeep it

[@djpuplex]

Dave wants you speak with his coaches, HLP, Lawyers oh and by the way would you like to be a coach? Amazing how the grift that just grows.

[@alinatamashevich3354]

Does your employer allow you to sell your competitions products or services? Didn't think so, stay off the hater-aid

[@djpuplex]

@@alinatamashevich3354 let me say this in a way you can understand bah bah 🐑

[@alinatamashevich3354]

@@djpuplex Real adult of you

[@yourgooglemeister6745]

Sell the rentals and buy a new phone