Refinancing my rental property

[Tre'nez Deriggs]

I recently bought a rental property in July of this year with 20% down. I've been collecting good cashflow on the property (approx. $450/month). My plan is to cash-out refinancing the property later on next year after allowing my tenant to pay down more of the principal, and use whatever equity I pull out as a down payment for another property. This is a strategy I did initially with my primary home which allowed me to acquire this rental, any suggestions/thoughts/tips about this method would be helpful

[Kyle J.]

There normally wouldn’t be enough principal paydown in the first year of ownership to justify a cashout refi, especially where you had enough equity to pull out enough to purchase another property. That is, unless you’ve done some extensive work to this property and drastically increased its value. 

Congrats on this solid cash flowing rental property though.