Pros and cons of refi rental
I currently have one rental with 116k loan at 4.5% , and 157k value. (Condo, got crushed in the down turn, but I kept it). I currently barely break even on the rental. I plan to sell it in 15 years. I have the home I live in with 80k left on a 113k loan at 3%, with a home value of 200k. I plan on renting it out for 1400-1500. I have a 15 year loan on it currently, but was considering doing a 30 year cash out refi (120-140k) to help buffer my liquidity to buy a new home ( I would drain all my cash on the down payment otherwise), and bring in more cash to either invest or pay back into the mortgage. I also plan on selling it in 15 years.
I've always thought that having a loan for a long time is bad because of interest over time, but if someone else is paying for the mortgage, while being cash flow positive, on relatively small loans, do I really care? Wouldn't doing a refi into a 30 year loan make me more cash flow positive? and If I change my mind about selling, I can always make additional payments on the loans. Is there a better plan? Or are my thoughts terrible, but I just can't see it yet? Thanks for any help!