> When the house is paid off from rental income + what you had to pay in mortgage anyway (this will take between 5 to 10 years) buy another house and do a 1031

> When the house is paid off from rental income + what you had to pay in mortgage anyway (this will take between 5 to 10 years) buy another house and do a 1031 exchange. This means if you're mortgage is $3000 and your rental income is $3500, don't pocket the cash. Just to be clear, that is not what a 1031 exchange is. A 1031 exchange allows you to sell a property and buy another one, all while deferring the capital gains tax, so you have more principal to put into the down payment [1]. I think the more accurate advice here is when your property has appreciated enough from your renovations, repairs, and market appreciation, you can use that appreciation when selling + your principal (equity) to put a down payment on a bigger unit (such as a multiplex) and repeat the process. [1] https://apiexchange.com/what-is-a-1031-exchange/ https://apiexchange.com/what-is-a-1031-exchange/