Recommended finance option for 1st time STR income property?

[Danny Valle]

My wife and I have talked about investing in a STR and occasionally using it as a vaca home for ourselves. We own our primary residence (no mortgage), and we believe we can make good use of our equity. We also have cash set aside for a downpayment if needed. We are learning more and more about HELOC and cash out refinance.

What are some recommendations to proceed? This being our 1st time doing this, we also want to grow at some point and invest in other properties once we get going with the first.

[Nathan Gesner]

Quote from @Danny Valle:

My wife and I have talked about investing in a STR and occasionally using it as a vaca home for ourselves. We own our primary residence (no mortgage), and we believe we can make good use of our equity. We also have cash set aside for a downpayment if needed. We are learning more and more about HELOC and cash out refinance.

What are some recommendations to proceed? This being our 1st time doing this, we also want to grow at some point and invest in other properties once we get going with the first.

There are a variety of options. The best one is to save up and buy a vacation home that doesn't impact the equity of your current home. If you borrow from your current home, the success of your primary home depends on the success of your vacation home.

If you refinance, that gives you money to invest in a vacation rental, but once it's spent, it's spent. If you get a line of credit, you can use it more than once and you only pay interest when you borrow against it. This is my preference, as long as you can pay back the amount borrowed in a short period of time.