Now Is A Great Time To Refinance That Investment Property

Mortgage rates are at all-time lows.  Many homeowner’s are taking advantage and locking in for the long term.  But what about investors, are they doing the same?

Refinancing rental properties can unlock a good deal of wealth-building opportunities for investors, including the ability to lower interest rates and monthly payments, improve loan terms, and earn additional cash flow.

Interestingly, many investors have not taken advantage of today’s market.

For one reason or another, there are a number of investors that don’t even realize the opportunity that’s in front of them.

Should I Refinance My Rental Property?

In most cases, investors should consider a refinance to:

  • Lower the mortgage rate
  • Convert from an ARM to a fixed-rate
  • Turn a hard money loan into a conventional one
  • Pay off the loan more quickly
  • Upgrade a current investment property

Much has changed in a relatively short period of time regarding rates and valuations…and they are almost all in favor of the investor.

As mentioned earlier, interest rates are historically low…and they look a lot better than they did even this time last year, let alone a few years ago.

5.75% versus 4.5% example

If you purchased an investment property in October of last year, for example, many borrowers took on mortgages with an interest rate in the high 5% range.

Today, if that investor were to refinance their $250,000 loan from 5.75% to 4.5% for example, they would save nearly $200 per month.

There might be some discount points involved depending on the scenario, but they can be financed into the loan amount, so the only out-of-pocket cost would be that of an appraisal.

Assumptions: $250K loan, 70% loan-to-value and 760+ credit score

In Conclusion

When you own an investment property, the goal is to earn a solid rate of return…and refinancing that property can increase your short-term cash flow and help you build longer-term wealth.

The above is from my referral partner Tom Bonetto and is geared for 1-4 units.

Remember that I answer my phone and call me to discuss the market anytime!

Linda 602-688-9279.

 

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Here is GOOD news to my New and Existing Clients!-Cost Segregation – Tax Saving Solutions

Cost Segregation is an application by which commercial property owners accelerate depreciation and reduce the amount of taxes owed!  I have used this myself quite successfully.  This savings generates substantial cash flow that the investor can use to reinvest into other investments or pay now their loans for principal reductions thus generating more cash flow!

 

A Cost Segregation Study is an engineering-based calculation that you can provide to your CPA. These calculations are used to change the way their commercial property is depreciated. This is an affordable, legal method of reducing income so the investor pays less in income taxes. The AICPA and Journal of Accountancy both suggest the use of Cost Segregation Studies for clients who own commercial and residential rental income properties.

 

When I sell a piece of commercial property, it is likely that my client is not taking advantage of all the tax strategies and write-downs, written to their benefit, that are available to them through new and existing tax code. This information could not only benefit them on the property they just purchased, but on others in their portfolio. Most of my clients would love additional cash flow from a reduction in their largest expense: taxes.

 

If you have an interest in this, I have a good source for this service. Schedule a call with me today.  If even you are thinking of purchasing or have already purchased.  

 

One fourplex saved me $12,000 to offset against my own tax bill!!!  I am always looking out for your bottom line!!!

 

I hope that everyone is doing well.  The Phoenix Market is absolutely on fire.  

 

Call me and as you know I answer my phone  602-688-9279.

 

Linda

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