Increase Cash Flow in South Dakota
If you have built up considerable equity in the property, you could turn that equity into cash by doing a cash-out refinance, for instance. If, however, you refinance to a lower rate and increase the term of your loan, it could also lower your monthly mortgage payment and increase your cash flow even more. The home equity in your investment property can be used to fund improvements to your property and boost your cash flow. One benefit of refinancing and making home improvements to your investment property is that it increases its market value, thereby allowing you to increase the amount of rent you charge to your tenants.
If you have a Home Equity Line of Credit, you could build an addition to increase living space, upgrade the floors, doors, kitchen appliances and cabinetry, remodel the bathroom with nicer fixtures, upgrade the furnace or central air, replace the roof, paint or re-side the house to enhance the exterior appearance.
You can use a home equity loan to invest further in real estate. Equity in your investment property increases each year as the mortgage loan is paid down. Any increase in the value of the property will increase your equity in addition to the principal paid.
In order to capitalize on that return, you can tap into that added equity, turn it into cash by refinancing and then apply it toward funding further investment properties.
The opportunity to use equity you have earned in your investment property is a major benefit of home ownership. The beauty is that you can refinance and convert the home equity into cash and then use it for whatever you choose.
Making improvements to your property or purchasing additional investment properties are good examples of how refinancing can work to your advantage. The cash from your home equity can also be used to boost your retirement savings. You can invest in stocks or other markets. Take the vacation of your dreams, buy a new car or boat and consolidate debt, or even help fund your children's college tuition.
Long-term South Dakota interest rates have been at near historic low levels for quite some time and thus, more people are looking for places to rent, making it easy to benefit from these investments. Your investment property loan may have terms that were very attractive when you first made the purchase, but due to changing market conditions may no longer be as favorable as they could be today.