With record low interest rates, such as the ones below four percent that you can find Mortgage Loans, there hasn’t been a better time to refinance investment property than right now. Other than simply saving you money, refinancing investment property can give you more flexibility in setting rents and allow you to expand your business. If you’re qualified, here are a few things that you can do when you with the money you get from refinancing.
Increase Cash Flow
The first thing that you can do with your money when you refinance investment property is to enjoy the increased cash flow. This can happen in two different ways. If you take out your refinancing loan for the same amount of time as your current mortgage, you can get a lower interest rate and thus lower payments each month. If your rents stay the same, this gives you some extra money each month that you can use for repairs, purchasing, new properties, or just having fun.
The other way that refinancing can increase your cash flow is by pushing your payments further into the future. For example, if there are currently 15 years left on a 30 year loan, and you refinance those 15 years for a 30 year term, the payments each month will be much less. This will once again give you more money in your pocket each month, but it will also increase the amount of interest that you ultimately pay on your mortgage so beware.
Lower the Rents You Charge
Another possible effect of finding new investment property financing is being able to lower the rents that you charge to potential clients to make your property easier to rent overall. This is especially useful if you own beach investment property where renters will be particularly price sensitive, even more so in a market with lots of options. But regardless of if you own beachfront property or not, lower rates will give you more potential renters that you can choose from. The best way to do this is to refinance your property for a longer terms, but while this is good for a short term fix, remember that the mortgage will end up costing you more in the long run.
Renovate Your Property to Charge Higher Rents
On to opposite end of the spectrum, you can use the money from refinancing investment properties to do some renovations and other home improvement projects that will allow you to charge higher rents. You’ll only be able to do this if you have enough equity to take out of your home, but with low rates and a potential higher gain on your investment income, it’s one of many great investment property strategies that can really improve the profitability of your business.
Buy More Properties
A final great way to use investment property refinancing funds is to buy more property. Buying investment properties using equity that you already own is cheaper than getting a new loan for the property and will help to save you money and give you a larger ROI overall on your business.
If you’re ready to get started on refinancing investment properties, the best way to do it is through a mortgage broker such as Mortgage Loans. If you use Mortgage Loans, you can see competitive rates from multiple banks at one time and even get rates below 4%! Try finding that by spending the whole day meeting and calling loan officers at local banks. If you’re ready, you can get started below.