Brokered by: Coldwell Banker Park City, Paula Higman Real Estate
Many investors consider paying all cash for an investment property, and in today’s market, it may feel like everyone is paying all cash.
To be clear, even when investors use terms like “all cash,” the truth is, no “cash” is actually traded. In most cases, the buyer brings a check (usually certified funds, or wire transfer) to the title company, and the title company writes a check to the seller.
This is the easiest form of financing because there are typically no complications, but for most investors (and probably the vast majority of new investors) all cash is not an option. Let us look at the pros and cons as our parents taught us on several subjects.
Pros:
1. Faster Closings
2. Waiving contingencies
3. Potential price discount
4. Save on mortgage interest and PMI
Con's:
1. Tying up your money
2. Losing out on better investments
3. It takes longer to save up
All-cash purchases: No mortgage is nice, but there are other expenses you will be responsible for as a homeowner.
1. Property taxes
2. Homeowners insurance
3. Utilities and maintenance
4. HOA fees
Basic wealth generators of rental properties:
1. Cash flow
2. Appreciation
3. Tax savings
4. Loan paydown
Liability:
1. Good Chance of being sued for your assets
2. Disgruntled tenant
Pretend it isn’t an all-cash offer:
1. Don't get Lazy, look for the best deal!
2. Run the numbers as if there was a loan.
3. Use entities wisely
4. Consider financing later
Regardless of price point, our team is united in their efforts to support the client, support each other, and get the job done in the best way possible. Paula Higman Real Estate is a unique team of talented and diverse individuals with a passion for success and client satisfaction.
Contact Paula Higman today and let us take this journey with you to marketing and selling your home for the best value, to the biggest luxury real estate market out there.
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