I currently own a townhome with a value of probably around 100k, and I have about 30% equity in the home. I'm looking for advice about whether I should go the cashout refi route or HELOC since I want to use the equity to pay for another rental later.
To be honest 30% equity in the home isn't all that much, most banks will only lend up to 80% of the value. So you will pay all those closing costs to get 10% out which isn't enough for a down payment in most cases unless you get a killer deal or buy a much smaller property.
If you had more equity and had to choose between the two the answer is it depends.
If your rate is high and you can lock in a much lower rate ( by about 1.5-2% plus ) then the cash out refi is the best choice , also if you already had a property or two you have in mind that your ready to pull the trigger on and put in an offer for.
If you are unsure of a property but you want to be able to borrow when the time comes, the HELOC is better because you pay no interest until you withdrawal the funds and you can do it on any given business day.