Should I Sell My 4% Mortgage Rate Rental Property? ($300K Equity)

Episode #1,055

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Should you keep, refinance, or sell your rental property? If you’re sitting on a low mortgage rate and plenty of equity, you’ve probably asked yourself this once or twice within the past year. Most people who bought a rental property before 2020 have seen unprecedented appreciation and rock-bottom interest rates and are likely sitting on a war chest-sized home equity position. But that equity could be better spent investing in new properties than keeping your old ones.

This is Dave’s exact predicament. He’s got a property he bought back in 2016 that has over $300,000 in home equity. It’s cash flowing a solid $500 per month with a mortgage rate of just under four percent, but only producing a measly two percent cash-on-cash return. He’s getting four times the return on his recent investment property purchases, so should he sell? Not so fast; we’re doing the math to figure out whether he should keep, refinance, sell, or change strategies on this property.

Got the same good problem? Stick around as we even drop a fifth option most investors overlook entirely, which gives you the best of both worlds.


00:00 Intro
01:20 Property Details
04:51 1. Keep the Property
07:12 2. Refinance the Property
10:29 3. Sell the Property
17:12 4. Convert Into a Mid-Term Rental?
21:10 The Best Option?
22:24 5. Use Home Equity Instead