Should I use my equity and heloc?

[Cody Thayer]

Hey everyone,

I have a fairly ignorant question, and have read a bit on the matter. But everyone’s situation is different and it’s hard to gauge this wild market so I wanted to put my question out there.

I have a house in Nashville with about $200k in equity. I also have a $40,000 heloc on that same property. I just moved out of it and started renting the property at about $800 cash flow/month. 

i just moved into a 1958 home 15 minutes outside of Nashville with my girlfriend, and am renovating it. My question is- should I use my equity/heloc to invest in other rental properties, finish the renovation on this new property, or just leave it?

I feel like I have all this money just sitting there doing nothing, but maybe that’s what it’s supposed to be doing at this time due to the market volatility. What are y’all’s thoughts?

[Brad Jacobson]

One concept I learned a few years ago really blew my mind and instantly converted me into a buy & hold investor. It was the ROI on home appreciation.

If you own a $350,000 rental property and it appreciates a boring 3% per year, that's $10,5000/yr in appreciation.  That's almost $1,000 per month!

Holding on to property, even without big cashflow, is always a win.  I would recommend to always be buying as long as you have at least $10,000 in reserves for each property you own.

Good luck!