You guys are either over or under thinking this. Principal paydown on real estate should absolutely 100%, no questions asked count towards savings if you want to be accurate about it in an accounting sense. If you have goals other than accuracy, such as jedi mind tricking yourself into saving more by not counting it towards your savings rate, fine, that's up to you. But really, if it's not a form of savings then why would anyone ever make an extra principal payment? Why the voluntary expense? Expenses are everything else, including interest (aka rent on the money you've borrowed), taxes, HOA, repairs, etc. As others have pointed out, the ROI is irrelevant to this discussion.