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You own a rental house for years, and never see the 'big pay-off.' Can it be time to cash-in on your own investment, given that you've paid off the mortgage, and values are up? Not. 

The Problem With Selling 

Selling means you will have to pay a large capital gains tax. This can be prevented if you reinvest through a 1031 exchange, but the idea is that you want your cash, right? Also, a good rental gets more cash as rents go up. Are you wanting to get rid of this inflation-indexed retirement plan? What is the choice? 

Replacing Rental Property 

Have you considered that when you refinance, you could get a lot of your gain out from the property, without paying a penny in taxes? Borrowing money isn't a taxable event. You may take it and invest it however you want, and still keep your rentals. 

Let's take a look at an example. Learn new information on the affiliated paper by visiting [[http://www.nexopia.com/users/bagprice3/blog/2875-a-mortgage-without-fees|go here]]. Suppose you have owned a tiny apartment building for many years. You bought it for $240,000, with a downpayment of $40,000, and mortgage repayments of $1650 regular on the balance. Learn extra info on a related website by clicking [[http://www.purevolume.com/sushi48lamb/posts/4808610/Commercial+Property+Loans+|home page]]. Today it's worth $400,000, you simply owe $120,000, and your cash flow is around $800/month. How can you get at that value? 

A bank will most likely loan you 700-800 of the value, or $280,000. After paying off the initial mortgage, you're left with $160,000. For different viewpoints, consider checking out: [[http://marketides.com/2013/10/commercial-property-loans/|this page is not affiliated]]. With todays lower rates of interest, your cost on the new mortgage will be comparable. At most of the you might lose $50/month in cash flow. 

An even better scenario: Use $40,000 for high-return improvements to the property, including carports or laundry rooms, and then enhance the rents. You may have $120,000 left-over to invest any way you want, AND have greater cashflow. Does that sound a lot better than attempting to sell your retirement plan? Don't sell. Refinance that rental property!. [[http://www.bf-menlo.com/tenant-quality-affects-genuine-estate-value/|Website]] is a interesting online database for more about why to ponder this activity.