When's The Best Time To Sell, Refinance, or Hold A Rental Property? - Ep. 59

Apr 7, 2025

I have a lot of equity in my rental property. Should I sell, refinance, or hold it?

In this podcast, Tony Stephan answers the question: I have a lot of equity in my rental property, should I sell, refinance, or hold? It depends on your financial goals, market conditions, and cash flow needs. Here are some considerations for each option:

Sell

Best if: Property values are high, and you want to cash out and reinvest elsewhere.

Pros:

Capture appreciation and take profits.

Avoid future market downturns.

Reinvest in higher-yield opportunities.

Cons:

Capital gains taxes.

Loss of rental income.

Transaction costs (agent fees, closing costs, etc.).

Refinance

Best if: You need cash but want to keep the property.

Pros:

Pull out equity without selling.

Keep rental income and appreciation potential.

Possibly lower interest rate if current loan is high.

Cons:

Higher monthly payments.

Loan fees and closing costs.

Higher debt load.

Hold

Best if: The property is generating solid cash flow and appreciating.

Pros:

Passive income continues.

Equity builds over time.

Tax benefits (depreciation, mortgage interest deductions).

Cons:

Opportunity cost (equity tied up).

Market risks.

Ongoing property management headaches.

Questions to Ask Yourself:

How strong is my cash flow? If the property is making good money, holding might be best.

Do I need liquidity? If you need cash for another investment, refinancing or selling could be options.

What are interest rates like? If they’re low, refinancing might be smart.

What’s my long-term plan? If you want to build wealth through real estate, holding might be best.

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