How Does Rental Cash Damming Work?

Real estate investors understand that the mortgage interest is tax-deductible when you borrow money to purchase a rental property. The same goes for any expenses related to carrying the property, such as maintenance costs, property taxes, condo fees, etc. By extension, the interest cost on any money borrowed to pay for these expenses is also tax-deductible.
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Savvy real estate investors leverage this fact to optimize their cash flows for greater tax efficiency.
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This is accomplished by using the rental income from their portfolio to pay down their primary residence mortgage and then borrowing the money to fund their monthly rental expenses.
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This process is known as “debt conversion” and will generate increased tax refunds over time. Investors are advised to use the tax refunds to pay off their mortgage faster, thereby reducing long-term interest costs.