5 Ways to Pull Cash Out of a Rental Property Without Selling

Owning a rental property is one of the most effective ways to grow wealth over time. As your tenants pay down the mortgage and the property appreciates in value, you build equity—the difference between what your property is worth and what you owe on it.

At some point, most investors ask themselves: How can I use this equity without selling the property? Selling might provide a quick payday, but it also cuts off future rental income, tax advantages, and long-term appreciation. Fortunately, there are multiple strategies to pull money out of a rental property while continuing to own and profit from it.

In this article, we’ll walk through five proven ways to access rental property equity without selling your home and help you decide which option fits your goals.

1. Cash-Out Refinance for Rental Property

A cash-out refinance is one of the most common methods for tapping equity. In this process, you replace your existing mortgage with a new, larger loan. The lender pays off your old loan, and you receive the difference as cash.

Example:

• Current property value: $350,000 

• Existing loan balance: $175,000

• New loan at 75% loan-to-value (LTV): $262,500

• Cash in your pocket: $87,500

This strategy is particularly attractive if interest rates are favorable or if you want to lock in a fixed-rate loan.

Pros:

• Large lump sum of cash.

• Potential to secure better interest rates or terms.

• Consolidates your mortgage into one loan.

Cons:

• Closing costs can be significant.

• Monthly payments may increase.

• You’re restarting your mortgage term, which can extend debt payoff.

Cash-out refinances are best suited for investors who want a lump sum to purchase additional properties, fund renovations, or consolidate higher-interest debt.

2. Home Equity Loan for Rental Properties

A home equity loan—sometimes called a “second mortgage”—allows you to borrow a fixed amount against your rental property’s equity while keeping your first mortgage in place. You repay it with fixed monthly installments over a set period, typically 5–15 years.

Pros:

• Predictable payments with a fixed interest rate.

• Keeps your original mortgage intact.

• Good option if you need a specific lump sum amount.

Cons:

• Adds a second lien to your property.

• Monthly payments begin immediately.

• Interest rates are usually higher than primary mortgages.

Home equity loans are ideal for investors who need a one-time payout for big projects like roof replacements, property upgrades, or even making a down payment on another rental.

3. Home Equity Line of Credit (HELOC) for Rental Properties

A HELOC is similar to a credit card secured by your property. Lenders give you a credit limit—based on your equity—and you can borrow, repay, and borrow again during the draw period (usually 5–10 years).

Pros:

• Flexible: borrow only what you need, when you need it.

• Pay interest only on the amount you use.

• Revolving credit gives you ongoing access to funds.

Cons: 

• Variable interest rates can increase over time.

• Payments may rise unexpectedly.

• Stricter approval standards for rental properties.

A HELOC is perfect for investors who prefer financial flexibility. For example, you might draw funds for a small renovation today, then use more next year to cover a down payment on a new property.

4. DSCR Loan (Debt Service Coverage Ratio Loan) to Buy or Refinance Rental Property

A DSCR loan is an increasingly popular option for real estate investors. Instead of relying on your personal income to qualify, lenders use the property’s rental income to determine loan approval. If your rental income comfortably covers the mortgage payments, you may qualify for a DSCR refinance that allows you to pull cash out.

Pros:

• Easier qualification for investors with multiple properties.

• Flexible underwriting focused on property income.

• Can be used for both purchases and cash-out refinances.

Cons:

• Rates may be slightly higher than conventional loans.

• Not all lenders offer DSCR loans.

• Loan-to-value limits can vary.

DSCR loans are excellent for portfolio investors who may not show strong personal income on paper but have profitable rental properties. 

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5. Creative Financing Strategies to Pull Cash out of Rental Property

If traditional lending isn’t the right fit, you can still tap equity through creative financing options. These may include:

• Seller Financing on Another Deal: Use equity in one property as leverage when negotiating terms on your next purchase.

• Partnerships or Joint Ventures: Bring in a partner who invests cash in exchange for a share of equity.

• Private or Hard Money Loans: Short-term loans from private investors or specialized lenders that allow you to access equity quickly.

While these methods may come with higher interest rates or more complex structures, they can be useful for investors who need flexibility or have unique circumstances.

How to Decide Which Strategy Works Best to Pull Cash Out of Rental

Choosing the right approach depends on several factors: 

• Your financial goals: Do you want to scale your portfolio, renovate, or consolidate debt?

• Current interest rates: If rates are low, a cash-out refinance may be smart. If rates are high, a HELOC or DSCR loan might be more strategic.

• Your credit profile and income situation: Some options require strong credit and income; others (like DSCR loans) focus more on property performance.

• Equity available: The more equity you’ve built, the more flexibility you’ll have.

Final Thoughts on 5 Ways to Pull Cash out of Rental Property

Equity in your rental property is more than just a number on paper—it’s an asset you can put to work. By using strategies like cash-out refinancing, home equity loans, HELOCs, DSCR loans, or creative financing, you can unlock the value in your property without giving up ownership.

Done wisely, tapping equity can fuel future investments, improve your rental portfolio, and accelerate your path to financial freedom. The key is to match the right strategy to your personal and business goals, while always keeping an eye on long-term cash flow and debt management. 

Ready to pull cash out of your rental properties? Start the pre-approval process for a cash-out refinance today.

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