Refinance our rental property?

[Lyndsey Keller]

I apologize if I'm putting this on the wrong board. Feel free to move it if need be.

How does one figure out if it's worth it to refinance a rental property? We have one mortgage, and that's on our rental property. What was once our home, we became accidental landlords when we were unable to the sell the property. While the rent income does cover the mortgage payment, there's not much profit. We are currently making extra payments on the mortgage, trying to get it paid off. We have no other debt, and we'd like to get rid of this mortgage as well. Refinancing would make our mortgage payment lower, meaning I could sock more toward the actual principle, right? But then with the costs involved in refinancing, I'm not sure it would be worth it. We are enjoying the rental aspect and no longer want to sell.

House was appraised for $80,000 in 2009.

Our current interest rate is 5.3% and there is $60,000 left on the loan.

If we do refinance, is it best to do so without tenants in the house? Does it matter? I'm assuming the house will have to be re-appraised, and I'm also assuming the value will go up, as the kitchen and bathroom and garage were all gutted and re-done in 2009/2010.

Just looking for a little insight. Thanks in advance.