Pay off rental duplex at 3.75% interest rate?

[BryanR]

I owe $100k on my rental duplex; it is worth about $275k. I'm really itching to pay it off, but is that dumb at 3.75%? It would offer simplicity and consistency, but wouldn't I be better served putting the dollars in the stock market?

[HPstache]

How quickly could you pay it off?

[BryanR]

I could pay it off now but of course that would come with the opportunity cost of having less cash money to buy stocks or real estate especially if there's a sale....

[Mr Mark]

And that's pretax so effectively you're paying even less.

I'm sure you can earn more than 2.8% by instead buying more real estate and diversifying your asset base. Or investing elsewhere according to your asset allocation.

[Radagast]

I would not pay off a 3.75% house loan now. I'd use the cash flow to look for my next investment.

[YttriumNitrate]

I also have about $100k mortgage on a rental at a similar rate (3.5%). My mortgage is a 30-year fixed rate, and will not be paying it off early even through I could. With interest rates rising, I expect in the next few years I'll be able to achieve a near-zero risk 3.5% return (more with more risk) in other investments.

[chasesfish]

How much liquidity would that leave you with?  Sounds fine to me as long as you have a cash cushion,  you never know when the next buying opportunity is

[Dicey]

And that's pretax so effectively you're paying even less.

I'm sure you can earn more than 2.8% by instead buying more real estate and diversifying your asset base. Or investing elsewhere according to your asset allocation.

Thanks, Mr Mark for writing my answer for me. Except that I could do it more bluntly in two words: Hell, no!