To cash-out refinance -or- keep positive cash-flow on a rental

[Bruce Schussler]

A lot of Podcasts and Youtuber's say to cash-out refinance to keep rents balanced with payment; (PITI) then use those funds strategically to re-invest either in more real estate or just put into a high interest bearing account or money market account...

Here's some of my thoughts and comparisons;

Cash-out refinance with new loan so rents balance with payment:

- The cash-out refinance is 100% tax free

- The funds can be put into a money-market account off-setting a portion of the interest charge of loan

- The loan balance gets eventually destroyed by inflation

- The liquid cash eventually gets destroyed by inflation 

- The interest on the new loan can be deducted from the rent income

- The refinance costs are 3-4% of the total

- There is less equity in the property and LLC that can be attached in case of a lawsuit

- The break-even on cash-out refinance with current interest costs on the new loan is around 12 years
 

Vs.

Paid-off property with positive cash flow:

- The positive rent income is 100% taxable minus only depreciation and property tax

- There is more equity in the property and LLC that can be attached with a lawsuit

- The break even is not until after 12 years at today's interest rates

- There is a rate risk in today's inflationary environment where interest rates on bonds keep rising

*It appears to me that the cash-out refi is in the best interest for a property investor; (Dave Ramsey would strongly disagree!) I've crunched the numbers on a typical 300-400K mortgage and the "break even" on refinance costs and rising rents is about 12-years.  A lot can happen in 12-years and we are currently in an inflationary environment where the rates don't seem to be going down with the Fed lowering short term interest rates.  

Any inputs or additional thoughts would be appreciated!