Going to Refinance, but should I pay off my rental property?

[Aaron Rocha]

I own a rental property in Denver that is producing 12-13% Cap rate. I owe $165k on the property and I am in the process of refinancing my primary home to pay off the rental property. My initial reason for doing this is that I will save over $700 in interest per month. Sounds like a no brainer, but am I missing something?

My primary home value is $700k. I currently owe $335k and my new loan paying off my rental will be $500k. Payments go up on my primary $450 a month, but I’m still saving over $700 a month overall.

1)Refinance and pay off my rental?

2)Refinance cash out and buy another investment property?

3) Refinance pay off my rental, snowball my primary, and use some cash reserves to buy another investment property?

I really appreciate your thoughts and perspectives and thank you in advance.