Posted by John on September 20, 2004 at 21:28:07:
I will try to answer your question.
When you have a paid for property lets say a 100k sfh.
It is like putting 100K in a jar and burring it in the back yard. When you dig it up you have a 100K.
You have unproductive equity that sits there. Where as if you remortgaged that property you could have at least 90k or more cash to invest in R/e or other business ventures. At todays rates mortgage rates are still very low which would cost 5.5% interest on the mortgage. That 90k could then be used to generate a return of 10,20% or more return that would pay the payments plus give monthly positive cash flow. All this said, it depends one the persons situation and tolerance for risk.