Rental Property - Refinance, Don't Sell
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 SellingSelling 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 PropertyHave 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.comWhen Is The Right Time To Refinance Your Mortgage?
You've heard that interest rates are down and you think it could be time to refinance your existing mortgage, but the entire loan application process was so exhausting during the initial loan that you aren't sure it's worth the hassle. You could very well be right, but there are some things you can do to help decide whether it's time to refinance your mortgage.The first thing you need to verify is the interest rate for your existing mortgage and the interest rates being offered across the board for new loans. If there's not at least a one and a half to two point difference, you're probably not going to be significantly better off to refinance your mortgage. Here's why. Remember those closing costs on your initial mortgage? You probably paid for an appraisal, perhaps a home inspector's services and even a survey if you have rural property.
Depending on how long it's been since your original loan, you may be faced with having all those processes repeated. Especially if you are going...
When Is The Right Time To Refinance Your Mortgage?
Refinance > When Is The Right Time To Refinance Your Mortgage?
Try Commercial Refinance Loans For Better Commercial Activities
Millions of people around the world have chosen business as a means of livelihood rather than a conventional employment. As in any other business we need money to truly express ourselves and get the best out of ourselves; it does not matter how talented or shrewd we are. Money is the quintessential thing for any task we want to undertake. A good option for money are the loans. But an option that could be even better for people involved in commercial activities is that of the commercial refinance loans.
Commercial Refinance Loan is a loan, which is intended for people who are involved in commercial or business activities.
How the refinancing works is that the business owners choose to take a new loan, which would be a replacement for the loan that has been dispensed. And thus start a new loan term from a new lender.
Now the question arises that why would someone take another loan to pay a loan. Would it not be similar in nature or how the loan works?...
Refinance > Try Commercial Refinance Loans For Better Commercial Activities
Refinance
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