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The shake-up of the economy, rising rental prices, and rising inflation have real estate owners asking if refinancing rental properties for the tax deductions is a must for 2022?
Refinancing rental properties is always something that an investor can do when the numbers and the strategy make sense. It isn’t as simple as ‘“the rates are still relatively low therefore refinancing rental properties is a no-brainer decision.” There are vital considerations, and calculations that need to be made before an investor makes a devastating choice in a panic.
In many markets, the pandemic has caused incredible increases in value for single-family homes, inspiring people to consider refinancing rental properties along with personal homes. But is this the right move, right now?
Adiel Gorel, owner of International Capital Group will be hosting the live zoom event to find out the best places to invest in real estate in 2022.
The biggest market boom was in the Phoenix, AZ. metro area. During over two years of the pandemic, the prices of those homes went up by over 65%!
A silver lining doesn’t guarantee success, especially for those looking to get rich quick, quick, quick. 4.3 million people quit long-term jobs in January of 2022. With so many moving out of the cities and into the suburbs, regular 9-5 families are working from home and can live anywhere to do it. Most of these people have not been preparing to move and are choosing to rent in the new location. Many investors are focusing solely on refinancing rental properties to accommodate this surge of people moving into apartments. Refinancing a current rental property can be a savvy move, as the rates have likely lowered since the original purchase, especially because refinancing rental properties means tax-free cash.
Tax-free cash sounds great and it can be if the strategy of reinvestment is great as well. The heart and soul of investing, especially in single-family home rentals, is the 30-year fixed-rate loan because that loan stays fixed despite inflation. Once an investor buys one and feels the power of that 30-year fixed-rate loan working, they see it makes inflation a friend. Inflation will erode the real value of a fixed-rate loan day after day, while the tenant is paying rents that pay off the mortgage.
Looking at it more closely, here’s where the tax-free money comes into play: investors can pull out cash to put as a downpayment on a new rental property tax-free. That would surely be an example of where it’s very savvy to be refinancing rental properties. This impactful strategy can be put into play for those who understand how to leverage tax-free cash to such an effect that it changes the financial future of a family line. Adiel Gorel, owner of the International Capital Group has helped thousands employ this strategy.
Here’s when refinancing rental properties may not be worth it unless the rate improves by at least 1.5%, and preferably 2% or more. With a single-family home in the sunbelt states at a 30-year fixed rate many investors wisely choose to do the hardest thing to do in real estate. Nothing! Many investors simply let these loans pay for themselves over the course of years… and rates will always fluctuate while holding a 30-year fixed-rate loan. Keep in mind that when refinancing rental properties, less than 1.5% improvement is usually not worth the refinance, unless you have a need to pull out cash, and can afford the higher payments. These hot topics of how inflation becomes your best friend, and when to refinance are what Adiel Gorel will share in his upcoming free virtual event. icgre.com/guide
Here’s what every investor needs to know to successfully refinance rental properties: when the amount of cash an investor can pull out is significant, especially when this amount is significant enough that it can be used as a downpayment to buy two or three more investment homes, it’s go-time. Increase the number of homes from one to three or four and get a loan at a very good rate for them during this time with the cash that’s been pulled out. Right now during the pandemic, the interest rates are essentially still historically low, which is another reason why a 30-year fixed-rate loan is a very good idea and why this has smarty pants investors scrambling to ride this economic wave to gain the benefit. It’s all about getting the details of this strategy behind refinancing rental properties before calling up the underwriter. Remember, the bank has its goals as a lender and they aren’t the same goals as the borrower. Education is key to coming through the inflation smarter, safer, and wealthier.
Visit ICGRE.com/guide to find out the best places to invest in real estate in 2022. Get details about rental property tax deductions today. Many people don’t know how rental income is taxed and are surprised by the answer. Being surprised is not a strategy Getting answers can mean a huge difference to the bottom line.
Contact Info:
Name: Adiel Gorel
Email: Send Email
Organization: ALLUSA INVESTMENTS, INC
Address: 165 North Redwood Drive, Suite #250, San Rafael, CA 94903, United States
Phone: +1-415-927-7504
Website: https://icgre.com
Source: PressCable
Release ID: 89075621
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