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inthe801 t1_jaar8ge wrote

The safe thing to do would pay cash and only do it if you still have 6 months to a year of living expenses reserved after you pay for the renovation. If you don't mind exposing yourself to the additional risk a HELOC and then refi might be the best option. Just look at the possibilities here with the economy unstable, jobs in some industries shrinking, and housing market unstable.

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IHkumicho t1_jaavlhe wrote

This. Would you borrow however much money at 7% to put in the market? Because if you borrow money for renovations while leaving your investments in the market, that's exacy what you're doing.

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onedollarshrimp OP t1_jaavwwt wrote

Not sure that I follow.

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IHkumicho t1_jaawys9 wrote

You're talking about taking out (let's say) a $50k loan so you can keep your $50k investments. How is that not the same as taking out a $50k loan to buy those investments instead?

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onedollarshrimp OP t1_jaayygd wrote

I guess I’m more assuming the market will return more than real estate. Especially considering we’re finishing basement and 3rd floor.

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IHkumicho t1_jab0sgk wrote

What you're spending the money on doesn't matter. The question is whether the investments you have will outpace the loan amount. It was one thing when interest rates were 2.5%, but completely different when you're looking at a 7% (or whatever).

The only way you should be asking whether the real estate returns will be bigger than the investments is whether you should do it at all.

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