Should you finance your next investment or pay cash?

Should I Pay Cash or Finance My Investment Property?

This is a classic investor’s dilemma: cash or financing? Both paths have pros and cons, and the answer depends on your strategy, goals, and market conditions. Let’s weigh the options:

💵 Paying Cash

Pros:

• No mortgage = No monthly payment

• Quicker closings, stronger offers

• No interest payments = potentially higher overall returns

• No lender requirements or red tape

Cons:

• Ties up a large chunk of capital

• Limits ability to buy multiple properties

• Lower liquidity in case of emergencies

🏦 Financing (Leverage)

Pros:

• Use other people’s money to grow faster

• Keep cash reserves for repairs, emergencies, or additional deals

• Potential for higher ROI through leveraged returns

Cons:

• Monthly debt service

• Risk of foreclosure if cash flow dries up

• Interest payments eat into profits

💡 The Bottom Line

If you’re after speed and simplicity, cash is king.

If you want to scale and maximize ROI, leverage is your friend.

Many experienced investors use a combo: buy with financing, refinance, and pull cash out to fund the next deal (a.k.a. the BRRRR method).

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