I have accumulated some equity in a rental property and I am interested in a cash-out refinance to purchase a new investment property. What are the advantages and disadvantages of a cash-out refinance.
From what I've read these are the pro's of a cash out refinance: You can invest with money that has low interest rate, the interest you pay is tax deductible, the biggest advantage however is all the cash you will receive and can use for your next investment property.
Some cons: you're going to usually be increasing usually increasing your mortgage amount, or extending your mortgage terms, which can be risky. Also before you cash out refinance run the numbers and see if your rental property will still have a positive cash flow, and if you'd be okay with that amount. Good luck!