Compare Cash with Financing when buying

 

A Question that every new investor is asking is ‘’Is it better to buy with cash or to finance the investment property? The answer is very relative because it depends on your investing goals.

Paying cash can help generate positive monthly cash flow!

When you buy a property in cash, you do not have to worry about interest accruing from taking out a mortgage. Also, sellers usually prefer cash offers. This is often referred to as a cash discount for buyers. Your property will not be leveraged against a mortgage, which makes it easier to resell. In addition, the property can later be used as collateral for a loan in case the owner needs cash.

On the other hand, financing can give you some greater returns. Cash flow is lower for the investor, but you will not need to put a large amount in a single investment, which reduces the risk and also the amount of taxes you have to pay for your rental property.

Last Updated: 5/24/2020 12:45:07 AM