When Is Buying Property With Cash For Investment Purposes A Good Idea?

Of all the heated debates in the field of real estate investing, none seem to be as polarizing as the “buying property with cash versus with mortgage” argument. We’ve discussed the argument in favor of a mortgage for financing investment properties before. Today, we’ll explore the reverse – when buying property with cash is a good idea.

What Is Buying an Investment Property with Cash?

Before we make the case for buying property with cash, we need to properly define the statement. Buying investment properties with cash refers to purchasing properties without the use of financing, such as a bank mortgage, hard money lenders, or private money lenders. The buyer, or real estate investor, in this case, must provide proof of funds before the purchase. Since no mortgage is attached to the purchase, mortgage payments, interest payments, and other associated fees are not necessary.

When Is Buying Property with Cash a Good Idea?

Financing investment properties with a mortgage is the go-to for many real estate investors, especially new ones. This, however, does not mean buying property with cash is utterly useless. Generally speaking, there are four instances when buying property with cash is favorable to buying with a mortgage:

What Are the Benefits of Buying Property with Cash?

Some of the best real estate investments funded with cash come with more benefits than the four previously mentioned situations. Some of these include:

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