You have a rental house for years, and never see the ‘big pay-off.’ Could it be time to cash-in on your own investment, given that you have reduced the mortgage, and values are up? Perhaps not. The Problem With Selling Selling means you should have to pay for a sizable capital gains tax. This is avoided if you reinvest through a 1031 exchange, but the purpose is that you want your cash, right? Also, a good rental gets more income as rents go up. Are you wanting to lose this inflation-indexed retirement plan? What is the choice? Refinancing Rental House Have you considered that when you refinance, you will get much of your gain out of the home, without paying a penny in taxes? Borrowing money isn’t a taxable event. You can take it and spend it however you want, and still keep your rentals. Let’s examine a good example. Suppose you have held a little apartment building for decades. You purchased it for $240,000, with a deposit of $40,000, and mortgage repayments of $1650 monthly on the total amount. Identify more on our partner portfolio – Browse this hyperlink: property management. Now it is worth $400,000, you only owe $120,000, and your money flow is about $800/month. How can you get at that fairness? A bank will most likely loan you 700-800 of the price, or $280,000. After paying off the very first mortgage, you’re left with $160,000. For other viewpoints, you might desire to have a peep at: property. With todays lower rates of interest, your cost to the new mortgage will be comparable. To read additional information, consider checking out: rancho mesa. For the most part you may drop $50/month in cash-flow. An even better scenario: Use $40,000 for high-return upgrades to the property, such as carports o-r laundry rooms, and then enhance the rents. You could have $120,000 left to pay in whatever way you want, AND have larger income. Does that sound much better than trying to sell your retirement plan? Don’t provide. Refinance that rental property!.