All Forum Posts by: Daniel Han
Daniel Han has started 1 posts and replied 2 times.
Post: Cash-out Refi or Sell?
- Rental Property Investor
- Fairfax, VA
- Posts 2
- Votes 1
@Greg R. thanks for your response. I won't necessarily need to sell this property to buy another, i'll have enough VA entitlement to use for a SFH in this area. What gets me is the property tax in Tx.
thanks for your response @Dylan Bennett. Appreciate the questions to help my thinking process and decision. I think home pries/rent will continue to increase as long as there is a shortage of housing and demand is strong. Rent is still increasing at the moment. My remaining entitlement will be enough for a SFH, or a duplex, and would rather for with VA than conventional.
Post: Cash-out Refi or Sell?
- Rental Property Investor
- Fairfax, VA
- Posts 2
- Votes 1
Hello BP community. I've been mulling over whether to do a cash-out Refi or to sell my rental property.
Currently residing in Northern VA, rental property is in West Texas (El Paso). Rental property was my primary residence until I relocated to NoVA last year. I'd like to have some cash readily available to eventually buy a primary residence (using the VA loan) in NoVA that I can house hack, or invest in 1-2 rental properties out of state in an area more favorable for cash flow, appreciation (midwest, or south). Property taxes in El Paso are really high (~2.8-3%) and with home values going up, this would result in higher taxes eating into my monthly mortgage/cash flow. Part of me also wonders if the home value will continue to remain as high, or drop in a few years (4-7) when I originally plan to sell.
Property value: ~280k; currently have ~100k in equity.
Current mortgage: 173k remaining on a 30yr fixed @ 2.75% (VA loan); 1360/mo (PITI)
Rent: 1800 (looking to increase rent when current lease expires); comps in area are 1950-2300
Monthly expenses: 250
Original down pmt and cash put into the property: 28k
If I refi, I'd refi to 200k (70% of property value), for a 30yr fixed @ 4.6%. This would put my new mortgage at ~1660/mo (PITI) and provide a cash out of ~23k.
Selling the rental property would reinstate my full VA entitlement (970k) to use here in NoVA for my next primary residence; if I went with a cash-out refi, remaining VA entitlement to use would be ~790k.
Should I sell now while prices are high, or do a cash-out refi and sell later (4-7 yrs)? Or just keep the rental with the low rate?
Thanks!