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Sitting on equity for 4 years cost me $22k, and I'd do the same thing again
Everyone in my local landlord group pushes people to pull the trigger on a cash out refi the second they hit 20% equity, and I think that advice is wrong for most folks. I looked at pulling $60k out of my rental in 2019 at 4.5% and instead held off until rates dropped, then did a smaller $35k pull in 2021 that covered the roof and still kept my payment under $900. Curious if anyone else has run the math on waiting versus pulling early, because the break even point is not as clean as people make it sound.
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the_jordan1d ago
The break even math changes a lot once you factor in what you actually do with the money. I pulled 40k out in 2018 at 5.25% to buy another place and that worked out fine, but if you're just sitting on the cash or using it for stuff you could save up for, waiting almost always wins. My lender kept pushing me to take more out and it took me a while to realize they don't care about my spread, they care about their fee. Run the numbers both ways with the actual rate you'd get today versus what you'd pay waiting a year or two.
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