Is It Better to Pay Off Your Owner-Occupant Mortgage When Nomading?
10/06/23 • 22 min
Most real estate investors consider themselves financially independent when the income from all of their investments exceeds their personal expenses. To achieve this, they need net positive cash flow from all rental properties after all expenses, any income generated from stocks, bonds, or other investments times a safe withdrawal rate, and any social security, pensions or annuities.
On the expense side, they need to consider all personal expenses, such as food, taxes, insurance, entertainment, healthcare, and housing. If they have a mortgage on their personal residence, that would include their mortgage payment. However, paying off the mortgage effectively reduces the amount of income needed to cover expenses by the amount of the mortgage payment that no longer exists.
If you have extra money invested in stocks, bonds, or other assets and could pay off your mortgage to achieve financial independence, it may be worth considering. This mini-class will explore the impact of paying off your owner-occupant mortgage and its effect on achieving financial independence faster than the traditional NomadTM strategy. We will also examine how this decision could impact your net worth and compare the risks to the traditional NomadTM strategy.
Check out the video and interactive charts from this class here:
https://RealEstateFinancialPlanner.com/model/nomad-or-pay-off-oo-fi/
Or, see Durham specific, detailed analysis of a variety of strategies here:
https://RealEstateFinancialPlanner.com/model/NC/Durham/
Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:
https://RealEstateFinancialPlanner.com/spreadsheet
Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.
Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Durham real estate investor podcast? Book a free consultation to discuss.
Most real estate investors consider themselves financially independent when the income from all of their investments exceeds their personal expenses. To achieve this, they need net positive cash flow from all rental properties after all expenses, any income generated from stocks, bonds, or other investments times a safe withdrawal rate, and any social security, pensions or annuities.
On the expense side, they need to consider all personal expenses, such as food, taxes, insurance, entertainment, healthcare, and housing. If they have a mortgage on their personal residence, that would include their mortgage payment. However, paying off the mortgage effectively reduces the amount of income needed to cover expenses by the amount of the mortgage payment that no longer exists.
If you have extra money invested in stocks, bonds, or other assets and could pay off your mortgage to achieve financial independence, it may be worth considering. This mini-class will explore the impact of paying off your owner-occupant mortgage and its effect on achieving financial independence faster than the traditional NomadTM strategy. We will also examine how this decision could impact your net worth and compare the risks to the traditional NomadTM strategy.
Check out the video and interactive charts from this class here:
https://RealEstateFinancialPlanner.com/model/nomad-or-pay-off-oo-fi/
Or, see Durham specific, detailed analysis of a variety of strategies here:
https://RealEstateFinancialPlanner.com/model/NC/Durham/
Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:
https://RealEstateFinancialPlanner.com/spreadsheet
Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.
Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Durham real estate investor podcast? Book a free consultation to discuss.
Previous Episode
Rental Portfolio Return in Dollars Quadrant™ Spreadsheet
Use this special spreadsheet to track the returns on each property in your portfolio.
It utilizes the Return in Dollars QuadrantTM methodology to easily allow you to track appreciation, cash flow, debt paydown, Cash Flow from DepreciationTM and the return on your reserves all in one place.
Plus, see how and when each return is taxed. And, whether the return is cash now or cash later. And finally, whether the return is more speculative and uncertain or less speculative and more certain.
Download the spreadsheet:
Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:
https://RealEstateFinancialPlanner.com/spreadsheet
Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.
Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Durham real estate investor podcast? Book a free consultation to discuss.
Next Episode
The Return on Investment on Extra Down Payments
The Return on Investment on Extra Down Payments
You’re buying a rental property. You have more than you need for a down payment, closing costs and reserves. One option you’re considering is putting more down.
Putting more down will often improve cash flow and Cash on Cash Return on Investment. The dollar amount of returns from Appreciation and Depreciation remain unchanged but, it can also lower your overall return on investment from Appreciation and Depreciation because your investment amount has changed. And putting more down changes how much debt you pay down and the amount you invested lowering your return on investment from debt paydown.
In this mini-class, James will look at how putting more down changes your return on investment so you can make an educated decision as to whether it makes sense or not to put more down and see improved cash flow.
Check out the video from this class here:
The Return on Investment on Extra Down Payments - Video
In this class, James discusses:
- James Orr's Return QuadrantsTM: Return in Dollars QuadrantTM, Return on Investment QuadrantTM and Return on Equity QuadrantTM
- Loan Comparison Spreadsheet
- The returns in dollars for NomadTM with 5% down
- The return on investment for Nomad with 5% down
- The returns and ROI for 15% down
- How 5% NomadTM compares to 15% down and the return on the extra down payment
- Similar comparisons for 20%, 25%, 30% and 40% down payment options
- Cash on Cash Return on Investment approaches Cap Rate
- Plus much more...
Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:
https://RealEstateFinancialPlanner.com/spreadsheet
Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.
Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Durham real estate investor podcast? Book a free consultation to discuss.
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