Refinancing rental property when the real estate market is up

Refinancing rental property require patience from investors. After three to five years. when the property value has increased through appreciation and payments to principal, is time to reassess your financial position.

As investor, you calculate and see how the return on equity (ROE) or the Return on Investment (ROI) is diminishing year after year.

The fact is, the equity is accumulating with every mortgage payment you make. When the equity is in "excess" that money does not work for you.

You want to reinvest the capital or spent the "excess" equity. By refinancing you take out money and do not pay taxes on them, until you sell that property.

Some web sites promote Get Rich Quick (GRQ)

1. to finance or refinance the loans on properties up to 90% or 100% loan to value;

2. borrow all the money, no money down is a good deal even if it only brings a little or no cash flow;

The damage is already done and the real estate "noise" is getting stronger due to more sophisticated marketing tricks available: mini movies, acting announcer, free downloads full of nothing, promising that the next download will give you the knowledge of making a six figure income, for a price of a large pizza, etc.

The point is: the marketing tools are not bad, but some current web sites content.

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