Comments on: What are the advantages and disadvantages of buying a house for cash?

By: Searchlight Crusade

Searchlight Crusade — Mon, 23 Mar 2009 13:48:59 +0000

Big advantage: Low cash flow requirements. Since you could use the cash to make the payments, of questionable value

Big disadvantage: No leverage. Since leverage is what makes real estate such a fantastic investment (as long as you don’t go overboard), this is like taking your queen and both rooks off the board at the start of a chess game.

There are times when buying for cash is a good idea. But not often.

By: dlapasky

dlapasky — Sun, 22 Mar 2009 19:00:26 +0000

In most cases, it will be better for you to get a mortgage. Even Bill Gates has a mortgage on his home. The reason being is that interest rates are still fairly low (at least in the U.S. - I’m unsure of the U.K.). You would be better off investing the cash you have because the return will be greater than the amount of interest you pay on a mortgage. If you get a mortgage at 6%, but you can invest your money and earn an 8% return, you just made 2% on your money, not to mention the money you will receive after you sell the home. You can make far more money by obtaining a mortgage and making wise investments with your cash.

By: bradley a

bradley a — Sun, 22 Mar 2009 03:05:49 +0000

if your wanting to be an investor cash is the best way to go if you have it the reason is number one you wont pay any interest think about that i mean that is pretty important ,an number two on a cash deal you can close faster therefore you can haggle the price lower

By: too expensive!

too expensive! — Wed, 18 Mar 2009 15:30:18 +0000

In the U.S. mortgage payment are tax deductable. Not sure about UK.

Another approach is to compare opportunity costs.

1. How much interests you need to pay to borrow.
2. If you borrow, you keep cash in your pocket, how much income can you bring in?

Compare amount of item 1 and 2.

By: Daniel M

Daniel M — Wed, 18 Mar 2009 15:20:40 +0000

no disadvantage, if you have cash use it you can always get an equity line of credit if you need $$$$ later

By: stevemorbitzer

stevemorbitzer — Wed, 18 Mar 2009 05:17:56 +0000

The above 2 answers are both wrong.
Call a lender, many lenders, to find your best program for borrowing. You will not only have to give them your REAL NAME but a great deal more personal information, but everyone who borrows does it. Borrow with little down as you can. Team up with a realtor who works in the area so you can get an idea of what you can sell it for. The amount you buy it for and the amount you sell it for is called the spread. The spread is where you see how much you can invest and make a profit.

By: sky_gurz

sky_gurz — Sat, 14 Mar 2009 21:09:35 +0000

emm from my experience. went u buy cash. u can save money from paying interest. but if something happen could hard to return back that money your given.

By: pink thong

pink thong — Wed, 11 Mar 2009 17:18:52 +0000

Don’t part with your cash.. Borrow on it…Consult a financial adviser - don’t tell them your real name. - You only buy with Cash if your Dodgy and you don’t want lenders or the Inland Revenue to peek at your Wad..