Refinance my rental property

[Dan Romero]

I currently own one rental property. I purchased the property in 2005 for 97k at 4.8% interest. Ridiculous, I know. It was my primary home for 10 years. The property is a 2br/1.5 bath townhouse in what use to be a nice area. I owe 57k. I'm currently underwater, no surprise. The property is rented by Volunteers of America. They provide low income properties for battered and abused women. The rent has been steady for over 5 years. I charge 1200 a month. After the mortgage ($725), HOA ($110) and property management fees ($150) are paid my remainder is $215. I would like to manage my own property, however, I recently moved out of state. I would also like to refinance for a lower interest rate but I'm not sure if I'll get approved. My credit is great, that's not the issue. My only concern is that the house will not appraise for the amount owed. I'm thinking of appraising the house before I contact any lenders so at least I know where I stand. Any advice would be greatly appreciated.

[Dale K Poyser]

you could ask an agent to run comps for you. But if you are looking at the recent sales in the area and saying they are under water, there is a good chance the appraisal will come out close to that since comps play a huge factor. Unless you have a lot of upgrades in the property.

Personally, you are almost halfway through the mortgage and probably paying mostly principal right now. In a few more years you will have a property free and clear. If anything I'd say tough it out and keep paying the principal down. In a few years you will have a lot of cash flow. I don't think it's worth adding another 15years onto your mortgage.