Cash out for paid off rentals for tax purposes?

[fire53]

Dear real estate rentals investors and tax gurus:
Is it better to cash out paid off rentals to get tax interest deduction ? (DW and I currently also have regular jobs)
I don’t really need the cash and it will be park in a saving account waiting for the right opportunity to invest in the stock market and real estate markets.

 

[kgtest]

Dear real estate rentals investors and tax gurus:
Is it better to cash out paid off rentals to get tax interest deduction ? (DW and I currently also have regular jobs)
I don’t really need the cash and it will be park in a saving account waiting for the right opportunity to invest in the stock market and real estate markets.

1031 exchange to reset the basis...and reap the tax rewards?

I don't know what you mean by interest deduction? IF it's paid off, why would you be getting any interest deduction on your taxes?

 

[JDARNELL]

I am not refi ing my units to take out cash. Instead stashing the cash to add more when the time
Is right. I like the cash flow.

 

[gauss]

Unless you can find a HELOC or HEL with an interest rate less than the typical savings account, I would question why you would want to do this.

Even if you find such an anomaly, I would doubt that it would last long.

-gauss

 

[Senator]

Paying $1,000 interest payment to avoid $300 in taxes doesn't make sense. Ever.

 

[BeachOrCity]

From my perspective real estate becomes a better investment with the right leverage vs real estate with no leverage.

But the right leverage has to have a good interest rate (sig lower than your CAP rate) for a reasonable period of time extending further than targeted hold period, not so much percent of LTV that your property can’t sustain a mild decline in value and still be above water if you sell, AND. it should have a generous debt service coverage ratio.

If it has all of those things leverage is good and you can buy more and make more