Right now we're debating paying off our rental property's mortgage quickly. The issue here is that it doesn't leave as much money to put into our contingency reserve fund. So my question is, is it stupid to use your house's equity itself as your contingency fund by taking out a HELOC? And if so, what sort of stupid, and in what circumstances?
The first thing I can think of is that we intend to use the rental properties' income as retirement income. We're pretty frugal, but still, if we had to pay back our HELOC balance with interest, that'd maybe make for some tight grocery bills for a few months.