u/Fun_Guide_8598

Looking for input from experienced investors.

I have a 4-unit investment property (~$1.2M value):

• 2 long-term rentals
• 2 Airbnb units
• Total income: ~$12k–$15k/month

Current mortgage:

• 7.5% interest rate
• ~$685k payoff

I have the liquidity to pay it off in full, but I’m debating capital allocation.

Option A: Pay it off

• Risk-free 7.5% return
• Significant increase in monthly cash flow
• De-risk balance sheet

Option B: Keep leverage

• Preserve liquidity
• Deploy capital into market / other investments / business expansion
• Potentially higher returns, but with risk

Other considerations:

• Mortgage interest tax deductions
• Opportunity cost of tying up ~$685k in equity
• Current rate environment vs expected market returns
• Value of flexibility vs guaranteed return

I’m not over-leveraged and have other investments in place. This is more about optimization, not survival.

Curious how others would approach this:

• Take the guaranteed 7.5%?
• Or keep the leverage and put the capital to work?

Especially interested in responses from those managing real estate portfolios or making similar decisions in this rate environment.