Refinancing with cash out or just refinancing

[Doug Cabrera]

Hello Folks,

Needing some advice on if I should refi with cash out on my investment property or just refi it to bring my monthly payments down. Estimated value on my property is about 200k, 70k is what is owed. I can have this paid off with in 10 years and have supplement income or I refi today, take out 70% of my equity (60K) and reinvest in another property. If I refi, it would be for 20 years. Any input is welcome, thank you

[Jeff Shumway]

There's a couple questions that come to mind on deciding whether or not to do this refinance. What are your long and short term goals? If you're trying to build a portfolio and have more streams of passive income then I would absolutely advise refinancing. If you plan on holding onto that property for the next ten years and content with the size of your portfolio, then you may be better off to not do the refinance.

Don't forget that every property you buy is basically another piggy bank you can draw on for a rainy day. The more properties you have, the more rainy day funds you have. You can always do a cash out refinance to access those funds. So long as the property is rented, your tenants will be the ones covering the expense. And it will constantly be refilling too as the property goes up in value and your tenants continue to pay down the mortgage.