To sale, hack/upgrade, or continue renting

[Micah Penley]

I currently have a house that I have been renting for the past 3 years. I have has the same tenants for those three years and there lease will be up in May 2019. There is currently 40K in equity in the house. I know I need to replace the HVAC system but the question is do I replace the HVAC and sale the property to use the equity to reinvest in a multi-family house back in my area. Do not allow my tenants to renew their lease and move in to turn the 2000 sq ft 3 bed/2 bath into a 4 bed/3 bath? The third step would it be better to place it on the market to use the increases equity to reinvest or try and rent it out at a higher rate and cash flow mkre.?

[Richard Crowe]

Micah! One option you may not be considering is to Refinance the loan. Since this is a VA loan, you should consider Refinancing it being that you may be eligible to get up to 100% of the appraised value. If you took out 20k to fix the AC and make some upgrades, you could force some equity in, lower your mortgage (I estimated your PMI to be about $1565, if you lowered your loan by 20k you could save about $100 a month. Now your $20 cash flow is $120), and you wouldn't loose your property. This is just another option to consider.

Only issue you may run into is that for VA loan, it needs to be owner occupied, which I assume you already know.

Here is an external source from military.com that highlights a VA cash out refinance: https://www.military.com/money/va-loans/cash-out-r...

Feel free to reach out if you have any questions.