Use Cash-Out Refis to Grow & Update Your Portfolio in 2020
Kick off the new decade strong by growing and updating your rental portfolio in 2020. Plus, we have the perfect tool to help you: cash-out refinances. A cash-out refinance is when you replace an existing mortgage with a new loan for a higher amount, and the difference in cash is yours, or when you obtain new financing on a property that is currently not pledged on a loan. Here is how cash-out refinancing can be a magic weapon for investors in 2020.
Leverage Your Existing Equity to Obtain Cash for 2020 Growth and Renovations
Access to capital can help investors:
Renovate and up the value of their rental properties and charge more rent
Buy more investment properties
Finance a flip
Take Advantage of Tax Benefits on a Time Constraint
2020 is a great year to update your rental properties before 100% bonus depreciation expires in 2022. Let's back up. When the Tax Cuts and Jobs Act (TCJA) was passed in 2017, the cap on bonus depreciation was changed from 50% to 100%. For landlords, this means improvements to your rentals other than anything on the physical structure can be deducted up to 100% such as fences, landscaping, swimming pools, outdoor lighting, sprinkler systems, etc. Act in 2020 to beat the upcoming deadline. Plus, what better way to finance these updates than a cash-out refinance?
Don't Forget About Section 179 of the Tax Code
Section 179 of the tax code allows taxpayers to deduct the costs (up to $510,000!) of certain types of property on their income taxes without capitalizing it. This includes deductions for structural improvements such as roofs, heating, ventilation, fire protection and security systems.
Ready to make 2020 your investment year? Contact us about cash-out refinancing today!
Disclaimer: The information in this blog has been prepared solely for informational purposes. The contents are based upon or derived from information generally believed to be reliable although Visio Lending accepts no liability with regard to the user's reliance on it. For legal advice, please contact your counsel.