Are you planning on paying cash for your investment property? While an opportunity for an investment property may arise where cash is king because of unique circumstances, there are other times you may need to dethrone your cash because it’s not in your best interest to use it as your payment method. You may wait a long time if you’re waiting until you’ve saved enough cash to buy a property. Additionally, if a rare opportunity should come along, your cash-only philosophy may cause you to miss out on a highly profitable investment. Read on as we explore the pros and cons of paying cash for your investment property in Greater Cincinnati.
Pros
Speed
When you pay cash for your Greater Cincinnati investment property, you have the power to move swiftly and close on bargains mere days after they hit the market. As the trend for home sales is exceptionally fast-paced, many properties are selling the day they are listed, cash buyers often make the first offer, which can sometimes make all the difference in getting a great deal.
Equity
Paying cash for your Greater Cincinnati investment property creates instant equity.
Increased Cash Flow
When you use cash for your Greater Cincinnati investment property, most of the monthly rent payment will be income because there will be no mortgage payment to make. Therefore, your only expenses will be any maintenance and other costs of the investment property that you incur as a part of your investment business.
Savings
One more benefit of paying cash for your Greater Cincinnati investment property is the savings you will realize by not paying interest on a loan.
Higher Priority with Sellers
An advantage of using cash for your Greater Cincinnati investment property is the priority of cash offers. So often, sellers must jump through numerous hoops to assist their buyers in qualifying for their funding with the lender; avoiding this red tape is an attractive aspect of cash offers to sellers.
Cons
Less Cash on Hand
Your available capital is limited when you use your cash on hand to buy Greater Cincinnati investment property. Then, because there’s no mortgage, the property must sell to regain the money you’ve invested or wait until you gain equity for ready cash to explore other investment properties to grow your portfolio.
Less Opportunity
Paying cash for your investment property means you will have less overall leverage for any other deals. However, using other people’s money to purchase your investment property while the property increases value over time allows you to grow your portfolio faster. In addition, your investments generate more current cash flow when you borrow funds for a portion of your investment properties than an investor limited by using only their available capital for funding.
Credit
When you pay cash for your Greater Cincinnati investment property, you must weigh the risk of changes from forces outside your control that could put you in a financial bind: unexpected significant expenses or loss of income may cause damage to your credit or worse.
Liability
Should you face a lawsuit after having paid cash for your Greater Cincinnati investment property, those investigating public records will see there is no debt, with no bank lien on the property, a disgruntled tenant could target you for a lawsuit.
We Buy NKY Houses will answer any questions about whether paying cash for your Greater Cincinnati investment property is right for you! If you want to explore how you can secure funding, the pros at We Buy NKY Houses can help you locate many resources that suit your current financial position. At We Buy NKY Houses, our professional investors have years of experience and can help you determine the best solution to buy your next investment property with no obligation. Contact We Buy NKY Houses at (859) 412-1940.
We Buy NKY Houses is Your Trusted Guide in Buying Your Investment Property
If you’re buying a home in Northern Kentucky or Cincinnati area property, We Buy NKY Houses has the experience you need to help make the buying process easier, less time consuming, and we’re on your side to help make sure you get the best deal while we worry about all of the details.
Either way, countless local home owners and investors trust We Buy NKY Houses to help them wade through the real estate buying and selling process while keeping more cash in your pocket and helping you save the time and headache of working with less experienced brokers.
If you have questions like: What is a good cash on cash return for an investment property? What are the disadvantages of investment property? Then give us a call! We take the time to listen to your concerns and answer any of your questions here at We Buy NKY Houses, with no obligation. Contact We Buy NKY Houses at (859) 412-1940 today!