Best Way To Profit
Now that I own rental property (8 units), what is the best way to profit from it? Do most of you refinance occasionally to draw equity out or is it best to struggle with the positive cash flow and eventually flip the property? I was impressed with my first tax season, I got a nice refund. Thanks! Cataman
You should not look to make money on the property while it is financed. The money you are cash-flowing may need to be used for property maintenance in the future. As long as you are cash-flowing, though, it is not costing you anything.
You can pull cash out when you need the cash for other investments. If you are looking to sell, make sure you have raised the rents because buyers will be looking at the income being produced. The higher the rents are the higher the value is. I am not saying to just raise rents for no reason because then you have pissed off tenants. I am suggesting making changes/updates to the property so tenants are willing to pay more.
I usually fix up the property then cash-out at 80% LTV. This way I get a good rate, no PMI, cash to move to next investment, and still have equity in the property for future wealth.