I want to seek the subs option: Current salary: $120k a year Current 401k contribution: 12.5% 27 years old
3 years ago I bought an investment property in West Palm Beach FL. I paid 150k and put 25% down. Cash flowing about $280 per month after all bills paid. I am also contributing to the mortgage and should have it paid off in about 1-1.5 years.
My question is would it be a bad idea to instead of stocking away 12.5% pre-tax into my 401k, I would put 8-9% post tax into a separate low Yield and risk account until I have enough saved ($40-50k) to buy a 2nd property, than rinse and repeat.
My thinking is if I can get to 10 units I will have paid somewhere around 500k but have properties valued around $1.5 million paying $3000 a month until the mortgage is paid off, that the portfolio would increase to about $9200 a month.
From the quick math I've done the depreciation and interest write offs I would get would just about make up the difference of paying post tax as opposed to pretaxed 401k.
My question is, am I making a mistake trying to buy as many rental properties as possible to hopefully one day live off the rental income, have someone else paying my mortgage and could always sell the properties and cash out when's i want to fully retire.
Submitted April 02, 2017 at 04:14AM by Throwbackthrowaway10 http://ift.tt/2op6mh7
