Why You Should Consider Buying Investment Properties with Cash
If you’ve decided to make a leap into buying investment properties, you should consider paying in cash. While paying in cash for investment properties depends on your financial situation, it might be right for you if you have enough for the investment, as well as a reserve for any potential repairs, vacancies or unexpected events. Paying cash offers a variety of advantages including lower ownership costs, faster closing time, and a more attractive offer to sellers. Let’s dig into these advantages to really learn why paying in cash can be beneficial to you.
3 Advantages of Buying Investment Properties with Cash
1. Ownership Costs: If you can afford to pay with cash (and have reserves for emergencies), you’ll have lower ownership costs once you have the property. The biggest expense for property owners is usually their mortgage and when you pay in all cash, you won’t have a mortgage to keep up with. This means you can focus on renovations and improvements without the added burden of an additional payment you need to keep up with.
2. Closing Time: If you pay in cash, you won’t need to wait for a bank to underwrite and approve your mortgage, which means that as long as your inspection is done quickly and goes as planned, you can close on the property in just a few days.
3. Attraction to Sellers: When it comes down to it, paying in cash is just more attractive to sellers. They love all-cash offers because they don’t have to worry about the bank pulling the loan at the very last minute. This sometimes means that you are able to pay a lower price than a buyer dependent on a mortgage, or you’ll just have a better chance of being accepted over other offers for the same price.
If you’re thinking of buying in cash, it can be great, but it’s not always the best choice to make sure that you really evaluate your financial situation. How will this purchase affect your finances and are the benefits worth it? Can you afford to sit on the investment for a while after putting down all that cash? These are all questions you need to ask yourself before making a decision. To learn more about the advantages that go along with buying investment properties with cash or for information about buying a home in Naples, contact me.