When things are booming like 2021, 2022 I'm inclined to weed out and sell to put more in TSM index funds for true passive income. When it is a buyers market I purchase and/or hold my rentals.
When things are booming like 2021, 2022 I'm inclined to weed out and sell to put more in TSM index funds for true passive income. When it is a buyers market I purchase and/or hold my rentals.
Great question, Melinda. In a market that’s constantly shifting, I keep it simple: refi and hold is still my favorite exit.
Here’s why:
1. Selling feels good today, but you lose the long-term cash flow.
Prices pop up and down, but rent rarely goes backwards. I’d rather keep the asset and let the tenant pay the note down for me.
2. Refinancing gives me the best of both worlds.
I pull out capital tax-free, lock in long-term financing, and keep the property generating income. As long as the numbers still cash flow after the refi, it’s the cleanest path to scale.
3. Renting is the safety net that works in any market.
Even when everything else is volatile, solid rental demand keeps the portfolio stable. And with voucher programs (Section 8 included), the income becomes even more predictable.
My philosophy: Only sell if the property is a problem child or the equity is trapped.
Everything else gets refinanced and held.
Great question, Melinda. In a market that’s constantly shifting, I keep it simple: refi and hold is still my favorite exit.
Here’s why:
1. Selling feels good today, but you lose the long-term cash flow.
Prices pop up and down, but rent rarely goes backwards. I’d rather keep the asset and let the tenant pay the note down for me.
2. Refinancing gives me the best of both worlds.
I pull out capital tax-free, lock in long-term financing, and keep the property generating income. As long as the numbers still cash flow after the refi, it’s the cleanest path to scale.
3. Renting is the safety net that works in any market.
Even when everything else is volatile, solid rental demand keeps the portfolio stable. And with voucher programs (Section 8 included), the income becomes even more predictable.
My philosophy: Only sell if the property is a problem child or the equity is trapped.
Everything else gets refinanced and held.
Great points especially about a solid rental being a steady investment although the whole COVID rent moratorium thing had my head spinning. How much does your average on refi cost and do you shorten term or start over?
Great question, Melinda. In a market that’s constantly shifting, I keep it simple: refi and hold is still my favorite exit.
Here’s why:
1. Selling feels good today, but you lose the long-term cash flow.
Prices pop up and down, but rent rarely goes backwards. I’d rather keep the asset and let the tenant pay the note down for me.
2. Refinancing gives me the best of both worlds.
I pull out capital tax-free, lock in long-term financing, and keep the property generating income. As long as the numbers still cash flow after the refi, it’s the cleanest path to scale.
3. Renting is the safety net that works in any market.
Even when everything else is volatile, solid rental demand keeps the portfolio stable. And with voucher programs (Section 8 included), the income becomes even more predictable.
My philosophy: Only sell if the property is a problem child or the equity is trapped.
Everything else gets refinanced and held.
Great points especially about a solid rental being a steady investment although the whole COVID rent moratorium thing had my head spinning. How much does your average on refi cost and do you shorten term or start over?
Great questions, Jules.
On the refi side, our typical all-in cost lands around two to three percent of the loan amount, depending on the lender we’re using and whether we’re doing a single-property refi or batching multiple together. For us, the math still works because the refi unlocks tax-free capital while keeping the cash flow strong enough to stand on its own.
As for term length, I almost always reset the clock and go back to a 30-year. My priority is maximizing monthly cash flow so the property can pay for itself comfortably and keep the portfolio stable. Shorter terms sound nice on paper, but I’d rather keep the payment low, preserve liquidity, and let the tenant continue paying down the principal for me.
The refi is just a tool to scale safely, not something that should strain the numbers. If it doesn’t still cash flow after the refi, we don’t do it.