Updated almost 6 years ago on . Most recent reply
Refinancing Paid for Rental
Need some advice from an more experienced investor..We have 1 paid for rental valued around 115k, would it be wise to refinance and pull out some equity for future investments. We really like having this one paid for, the cash flow is nice and secure. Having another mortgage makes us a bit nervous. Just not sure what the best option would be.
Most Popular Reply
It really depends on your goals and the quality of the deal you purchase with the refi money. Your return on equity is likely very low on your property that is paid off BUT maybe you already have as many rentals as you want to achieve your goal and you just need to pay them all down, in that case I wouldn't refinance. So we need to know what your long-term goals are.
Assuming you do need to buy more property to get where you want to be financially, the next question is what kind of return are you getting on the money you pull out of the rental? If you're buying a really good deal with the cash then it likely makes sense but we need more info.