Cash out refi at higher interest rate?--advice and perspective!!

[Nicole Bryan]

Hello fellow investors,

I'm contemplating a cash out refinance where the interest rate will be higher than my current rate. My current rate is 5.5% and the interest rate that I'm g. letting may be closer to 7.25% I'm thinking this because of the opportunity to cash out approximately $35,000 from the property, which I can then put into another property that will net me approximately $600 per month in passive income. My mortgage on the current property would increase by approximately $400 so my net gain would be $200 plus the ability to benefit from tax and income perspective from adding another property to my portfolio.

Anyone out there used a similar strategy? Any words of advice or caution? Other perspectives?

Thanks!