Refinancing means paying off your current mortgage with a new one on different terms. Landlords refinance for three main reasons: to capture a lower interest rate, to change the loan's length, or to do a cash-out refinance that converts accumulated equity into cash while keeping the property. The new loan resets your amortization schedule and comes with its own closing costs.
A cash-out refinance is a core wealth-building move in rental investing, and it is the refinance step in the BRRRR strategy, because the cash you pull out is loan proceeds, which are generally not taxable when received, letting you recycle capital into the next property. The trade-offs are real: closing costs, a possibly higher rate than your original loan, and higher debt service that eats into cash flow. Run the new payment against your rents before committing. This is general education, not tax advice.
This is general educational information, not legal or tax advice. Rules vary by state and locality and change over time — check your local law and confirm specifics with a qualified professional.