Should I sell my rental property to pay off CC debt or get an equity loan and have the tenants pay the loan?
1. How much of a credit card debt are you in?
2. Is the rental a cash flowing property?
3. How many other rentals do you have?
you have an asset performing at X, and a debt costing you Y. what will the numbers look like if you heloc it and put all that debt on it.
I just did a flip with the express purpose of paying off CC debt. If you can heloc and wear it, knowing you will pay a lower interest rate over years, and keep the asset.. do that...
Another alternative: balance transfers to 0% interest credit cards, which may be simpler or it may not apply to your situation. Some things to consider:
1. What is your credit score? From my experience, those 0% balance transfers are offered to people with a "Good" credit score.
2. Will you need a good credit score in the near future? Applying for credit cards will reduce your credit score and so will having additional revolving credit (credit cards).
3. How much debt do you have? In my experience, opening these 0% credit cards only gives you a $3,500 to $5,000 line of credit on each card, so you may have to open a few.
4. Do the numbers work? There are balance transfer fees of 3% to 4% of the total balance transferred, which are rolled into the new line of credit ( slightly reducing how much you can actually transfer to the new card).
As Carson was talking about, compare the money savings benefit to how much the transfers will cost you. ****It is very important to pay these cards off before the end of the introductory 0% interest term, otherwise they will nail you with all of the back interest.**** I learned that lesson the hard way but I was able to reduce the interest in half by offering to pay the entire balance immediately.
I hope this helps! Good luck.
It depends a lot on your personal situation. If you have maxed out your cards and have no financial management skills you should probably sell your property asap.
If your CC debt is manageable dedicate yourself to paying it off then lock them away so you do not use them again. No need to sell, borrow or refinance.
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