My rental property is paid off, but I need cash. Is this a bad time to take out a $50,000 HELOC?

The Federal Reserve's quarter-point increase lifts its benchmark rate to a 3.75%–4.0% range, and that matters directly for anyone weighing a home equity line of credit. HELOC rates are typically tied to the prime rate, which moves with Fed policy, so a new $50,000 line would likely carry a higher starting rate than one opened earlier this year. Unlike a fixed-rate mortgage, most HELOCs are variable, meaning the cost of borrowing can keep shifting after closing.

For a paid-off rental property, the equity itself isn't in question — the calculation is about cost and timing. A HELOC on an investment property often prices higher than one on a primary residence, and lenders may apply tighter standards. It's also worth noting that using the funds for business or investment purposes can affect how the interest is treated at tax time, a question for a tax professional rather than a lender.

What to watch: whether the Fed signals further increases or a pause, since that shapes where variable rates head next; and the margin your lender charges over prime, which varies by borrower and property type. Comparing a HELOC against a fixed-rate home equity loan or cash-out refinance can clarify which structure fits the need.