Thinking to refinance.

[Joshua Mellor]

I’m 41 years old and bought a triplex in 2004 for 135,000 at 6 percent, currently owe 84,000 left with 15 years to go. My return is around 300 a month after bills which up until this point I have just used as money towards other bills but now want to expand and build something for my daughter to pass onto her. I am wondering if it’s wise to refinance the 84,000 for 30 years which would basically double my return and buy another one in a few years or do a cash out refinance for 30 years and use that money to buy property sooner. Sorry forgot to mention the property would probably be assessed around 160,000 today. Would love to receive some opinions.

[Jaysen Medhurst]

@Kenneth Reimer, I think 5% ROE (not ROI) is more than "very conservative." To break that down, an investor that buys an A-class property that only generates 5% CoC ROI in order to have a safe and stable asset over the long term is surely choosing a conservative investment (perhaps as part of diversification and risk mitigation).

Another perspective, I work for a large bank (about as conservative as it gets) and we usually see ~13% ROE. So @Joshua Mellor's investment is 2.5X more conservative than a bank.

Not trying to split hairs too much, but ROI and ROE are different things and must be evaluated on their own terms.