I have seen many arguments against paying off houses but still I am not convinced. Equity is like a bond (in fact you are buying your own mortgage bond) and I don’t think it is a good asset allocation strategy to completely avoid bond.
I think it depends on the goal of your life. I would rather have 4 paid-off investment properties that generate cash flow every month than 10 investment properties that are cash-flow break-even. Besides, it is much easier to hold on investment properties with up and down in market value if it cash flows.
I do agree that equity in the primary home that you live in is pretty dead though…because by definition since you are living in it, the money won’t generate any cash flow. (Maybe except at the very end of it, you save the extra mortgage payment)
And tell me how you can get more than 3% with craps on craigslist without much effort with $100K+?
