Refinance Rental Property - Dont Sell It

You own a rental property for years, and never see the "big pay-off." Is it time to cash in on your investment, now that you've paid down the mortgage, and values are up? Maybe not.

The Problem With Selling

Selling means you'll have to pay a large capital gains tax. This can be avoided if you reinvest through a 1031 exchange, but then the point is that you want your money, right? Also, a good rental gets more income as rents go up. Do you want to lose this inflation-indexed retirement plan? What's the alternative?

Refinancing Rental Property

Have you considered that if you refinance, you can get much of your gain out of the property, without paying a penny in taxes? Borrowing money is not a taxable event. You can take it and spend it however you want, and still keep your rentals.

Let's look at an example. Suppose you have owned a small apartment building for years. You bought it for $240,000, with a downpayment of $40,000, and mortgage payments of $1650 monthly on the balance. Now it is worth $400,000, you only owe $120,000, and your cash flow is around $800/month. How do you get at that equity?

A bank will probably loan you 70% of the value, or $280,000. After paying off the first mortgage, you are left with $160,000. With todays lower interest rates, your payment on the new mortgage will be about the same. At most you might lose $50/month in cash flow.

An even better scenario: Use $40,000 for high-return upgrades to the property, such as carports or laundry rooms, and then raise the rents. You could have $120,000 left over to spend any way you want, AND have higher cash flow. Does that sound better than selling your retirement plan? Don't sell. Refinance that rental property!

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

---

Minneapolis Warehouse Loft

Downtown Minneapolis is rich with true metropolitan charm. With the... Read More

Real Estate Season is Here

Yes, it has finally arrived. This is the time of... Read More

Is It Wise to Take My Home Off the Market for the Holidays?

Let's say you've had your home on the market for... Read More

Should You Buy Real Estate Now

I have been seeing the market on fire for a... Read More

How to Build Your Dream Home

Building your dream home is a process that takes some... Read More

Buying Beach Houses in New Zealand: Real Estate and Investment Opportunities

Buying a beach house in New Zealand offers many possibilities.New... Read More

Encouraging Debt

Most of us don't talk about money, finances, credit, debt....Young... Read More

San Diego Home Evaluation

The Southern California city of San Diego has all the... Read More

Real Estate Development Feasibility Study (Income) - $1.2 Billion Developer Tells You How To Do One

There are two sides to a feasibility study and in... Read More

Landlording And Other Aggravations

Here's the gripping story...You are the landlord of a small... Read More

Guide To Finding The Perfect Central Illinois House

Central Illinois is an area rich in cultural activities and... Read More

Searching For Maui Beachfront Houses?

Who wouldn't want to move into a Maui beachfront house?... Read More

How to Research and Purchase a Good Investment Property

How much do you really know about investment property? Accurate... Read More

Property Investors, Scrub Your Thoughts and Start Again - Brazil, Brazil, Brazil!

Brazil Property - FortalezaThe PlaceWhat to do in a place... Read More

Tenant/Buyers Have Multiple Options

Lease Purchasing affords the tenant/buyer a wonderful opportunity to get... Read More

Buying a Home -- Is a Home Inspection a Good Idea?

To avoid "buying a pig in a poke," buyers have... Read More

Real Estate Investing In Belize

Any trip to Belize starts fantasies of owning a beach... Read More

Seller Financing - Six Safety Tips

Why offer seller financing when you sell? A higher price,... Read More

Home Sellers Warning for Young Families

If you're thinking about selling your home and moving up,... Read More

Do I Need A Real Estate Survey?

Getting a survey before you close on any real estate... Read More

Tax Assessment/Appraisal: How Do I Know What My Home is Worth?

If you are in the home buying or selling market,... Read More

Getting Started in Real Estate Foreclosure Investing

Decide to Invest in Real Estate Foreclosure InvestingWith the increase... Read More

Real Estate Investing in Rentals ? the $10 Million Real Estate Investing Mistake

Renting to tenants is no longer "where the money is"... Read More

How to Get the Best Price for Your House

The best price to sell your home is always determined... Read More

Real Estate Investing - Basis Explained

Our complex IRS code requires that your, as a real... Read More

How to Find and Buy a Bargain House with Little or No-Money Down

Real estate investors know how to make money buying distressed... Read More

Condo-Hotels ? A New Second-Home Alternative to Time Shares

Condo-hotels have evolved as a better, more reliable second home... Read More

How to Own a Dream Home in Spain

Every year hundreds of thousands of foreign visitors travel to... Read More

Buying a Home ? Dealing With Lender Letters

Most people who set out to buy a home, be... Read More

Are You Trying to Hit a Home Run With Your Prospects Without Asking Them on a Date?

Real Estate email marketingDo you remember the old School girl/boy... Read More

How To Spot A Good Buy

Beauty is in the eye of the beholder, particularly when... Read More

Selling Your Home ? What Can Go Wrong With Title and Lenders

If you're selling your home, there are going to be... Read More

10 Ways To Find Investment Properties

If you really want the best deals in investment properties,... Read More