Tap Rental Property Wealth Through Credit Line Magic

Potential Risks and How to Mitigate Them

While the benefits of using a credit line for rental properties are compelling, it's important to be aware of the potential risks. The primary concern is the variable interest rates associated with HELOCs, which can increase over time. To mitigate this risk, consider locking in a fixed rate when possible or setting aside an emergency fund to cover unexpected rate hikes. Additionally, over-leveraging can lead to financial strain, so it's crucial to maintain a healthy loan-to-value ratio and avoid borrowing more than you can comfortably repay².