If you think refinancing your investment property is a desperate move, think again. In actuality, by refinancing you can actually increase your cash flow considerably--especially if you've built up a good amount of equity in the property you intend to refinance.
You can use the money from the re-fi for whatever project you earmark them, including home improvements, financing the purchase of additional investment properties, college tuition, or paying off other loans whose fixed interest rates are high.
Because interest rates in general are at an all-time low, this is an opportune moment to refinance the mortgage on your investment property because a re-fi may offer ways to leverage the equity in your property, lower your monthly payment and increase your cash flow.
One of your options is to do a cash-out refinance and turn your equity in the house into cash. Refinancing to a lower rate and increasing the term of your loan can give you a lower mortgage payment and a greater cash flow. A professional loan banker can help you decide what works best for you based on your plans and the various loans available to you.
If you decide to use your re-fi money to upgrade an investment property, and if it's a rental, you can raise the rent accordingly. And since the improvements increase the property's market value you can anticipate a better price when you put a For Sale sign in front of the property.
Some of the best ways to cosmetically or non-cosmetically improve and upgrade your property with a cash-out refinance:
* Replace an old, damaged roof
* Paint the house, inside or out, or re-side the exterior
* Build an addition for increased living space
* Remodel the bathrooms and/or kitchen (these are the rooms that sell a house, more than any other)
* Upgrade heating, plumbing, central air
* Replace old kitchen appliances and cabinets with new
* Upgrade floors and doors
* Landscape the grounds
Or, use the cash to fund additional investments in real estate. Again, be sure to consult a home loan professional and get expert advice before you act.
You can also use the windfall cash from your refinance for purely personal things. You can:
o Increase your savings for your retirement
o Buy the new car you've always wanted
o Pay for your children's college tuition
o Go on a fabulous trip
o Invest in the stock market
o Consolidate other debts with high interest rates
As you can see, a cash-out refinance can be a valuable tool for those who invest in real estate. Refinancing is a good way to increase your own investment power and ultimately, your wealth.