I have a rental property that is paid off and I am wanting to pay off my primary residence which has a mortgage of $180,000. My question to the group is do I sell my rental property that is paid off and end up paying capital gains + depreciation tax or would I refinance for let's say $280,000, pay off my primary residence and have $100,000 to either pay off debt or reinvest?
Hey Vincent! If you refinance, how would the cash flow be on the property?
If it still would cash flow fine, I would refinance to accomplish your goal of paying off your primary residence, while having surplus funds to go and acquire another property.
It depends entirely on the financials of the rental property. The equity in your rental is likely not earning much s it depends on whether it cash flows leveraged of not.
Unless you intend to take a HELOC on your personal home why would you choose to pay it off. Shameful waste of valuble cash to a investor.