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I bought a 2-fam brownstone a couple of years ago hoping to get it renovated in my spare time with my spare cash, doing the work mostly by myself, and one day have a tenant.

This strategy has kind of worked. Things are getting done. Slowly. But now I notice that home equity loans are available at amazing rates. My bank is offering a home-equity loan for 3.99%!

I could, at this point, take out a loan for like 60K and finish up this process in a few months, and get a tenant, and pay the loan with the rent on the little apartment in five years. At the same time, with the renovation done, it might be possible to get an appraiser in and maybe get the original mortgage refinanced

(I have noticed that rates have fallen sharply for mortgages as well)

And save a little there too.

It all makes sense, except that I am allergic to debt. The mortgage is the only debt I have, and I am very serious about not living beyond my means. The idea of taking on a loan at a time when the nation is having a debt hangover galls me, and I can’t figure out whether my feelings about this are rational or not.

On one hand, I see exactly how I am going to pay the money back, and see the monetary benefits that come from getting the work finished quickly, as well as the personal benefits. It would be great to go ride bikes or see a movie on the weekend instead of build walls.

On the other, I see that I could just finish the work over the next two years by myself and save about 40 grand that never gets paid to anyone, and not invite this kind of risk into my life.

Advice?