Home › Forums › Closed Forums › Buying and Selling RE › Income property, mortgage vs cash purchase
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streak.
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January 17, 2010 at 11:21 PM #16924January 18, 2010 at 2:00 PM #503188
XBoxBoy
ParticipantIt really just depends on what you feel will be the return on your various options.
For instance, if you have cash, what are you going to do with that cash? Put it in short term treasuries and earn zero interest? Put it in the stock market and maybe make a killing or maybe lose half of it? Put it in gold and who knows how that’s gonna turn out?
Also, if you buy a quadplex now and the value of the quadplex drops, you might have a hard time getting your money out. Also, where and at what price you buy this quadplex will have a big impact on your return. Also, how interested are you in being a landlord?
Personally, I’m of the opinion that because the fed and the govt have made it painful to be a saver, most investors are taking on way more risk, while trying to chase returns, then they realize or admit. Consequently, very few investments are worth pursuing.
If you have cash, seems to me it’s better to use the cash to buy the house. If the house value drops, well at least you’ve got a place to live. It’s not the most daring plan, and you won’t get rich off it, but as mentioned, you’ll have a house to live in.
I’m sure that plenty will disagree with me though. There is certainly an argument that if you can borrow you should, as you open up the opportunity for leverage. (and bankruptcy too, but that’s a detail)
Just my two cents.
XBoxBoy
January 18, 2010 at 2:00 PM #504074XBoxBoy
ParticipantIt really just depends on what you feel will be the return on your various options.
For instance, if you have cash, what are you going to do with that cash? Put it in short term treasuries and earn zero interest? Put it in the stock market and maybe make a killing or maybe lose half of it? Put it in gold and who knows how that’s gonna turn out?
Also, if you buy a quadplex now and the value of the quadplex drops, you might have a hard time getting your money out. Also, where and at what price you buy this quadplex will have a big impact on your return. Also, how interested are you in being a landlord?
Personally, I’m of the opinion that because the fed and the govt have made it painful to be a saver, most investors are taking on way more risk, while trying to chase returns, then they realize or admit. Consequently, very few investments are worth pursuing.
If you have cash, seems to me it’s better to use the cash to buy the house. If the house value drops, well at least you’ve got a place to live. It’s not the most daring plan, and you won’t get rich off it, but as mentioned, you’ll have a house to live in.
I’m sure that plenty will disagree with me though. There is certainly an argument that if you can borrow you should, as you open up the opportunity for leverage. (and bankruptcy too, but that’s a detail)
Just my two cents.
XBoxBoy
January 18, 2010 at 2:00 PM #503828XBoxBoy
ParticipantIt really just depends on what you feel will be the return on your various options.
For instance, if you have cash, what are you going to do with that cash? Put it in short term treasuries and earn zero interest? Put it in the stock market and maybe make a killing or maybe lose half of it? Put it in gold and who knows how that’s gonna turn out?
Also, if you buy a quadplex now and the value of the quadplex drops, you might have a hard time getting your money out. Also, where and at what price you buy this quadplex will have a big impact on your return. Also, how interested are you in being a landlord?
Personally, I’m of the opinion that because the fed and the govt have made it painful to be a saver, most investors are taking on way more risk, while trying to chase returns, then they realize or admit. Consequently, very few investments are worth pursuing.
If you have cash, seems to me it’s better to use the cash to buy the house. If the house value drops, well at least you’ve got a place to live. It’s not the most daring plan, and you won’t get rich off it, but as mentioned, you’ll have a house to live in.
I’m sure that plenty will disagree with me though. There is certainly an argument that if you can borrow you should, as you open up the opportunity for leverage. (and bankruptcy too, but that’s a detail)
Just my two cents.
XBoxBoy
January 18, 2010 at 2:00 PM #503735XBoxBoy
ParticipantIt really just depends on what you feel will be the return on your various options.
For instance, if you have cash, what are you going to do with that cash? Put it in short term treasuries and earn zero interest? Put it in the stock market and maybe make a killing or maybe lose half of it? Put it in gold and who knows how that’s gonna turn out?
Also, if you buy a quadplex now and the value of the quadplex drops, you might have a hard time getting your money out. Also, where and at what price you buy this quadplex will have a big impact on your return. Also, how interested are you in being a landlord?
Personally, I’m of the opinion that because the fed and the govt have made it painful to be a saver, most investors are taking on way more risk, while trying to chase returns, then they realize or admit. Consequently, very few investments are worth pursuing.
If you have cash, seems to me it’s better to use the cash to buy the house. If the house value drops, well at least you’ve got a place to live. It’s not the most daring plan, and you won’t get rich off it, but as mentioned, you’ll have a house to live in.
I’m sure that plenty will disagree with me though. There is certainly an argument that if you can borrow you should, as you open up the opportunity for leverage. (and bankruptcy too, but that’s a detail)
Just my two cents.
XBoxBoy
January 18, 2010 at 2:00 PM #503336XBoxBoy
ParticipantIt really just depends on what you feel will be the return on your various options.
For instance, if you have cash, what are you going to do with that cash? Put it in short term treasuries and earn zero interest? Put it in the stock market and maybe make a killing or maybe lose half of it? Put it in gold and who knows how that’s gonna turn out?
Also, if you buy a quadplex now and the value of the quadplex drops, you might have a hard time getting your money out. Also, where and at what price you buy this quadplex will have a big impact on your return. Also, how interested are you in being a landlord?
Personally, I’m of the opinion that because the fed and the govt have made it painful to be a saver, most investors are taking on way more risk, while trying to chase returns, then they realize or admit. Consequently, very few investments are worth pursuing.
If you have cash, seems to me it’s better to use the cash to buy the house. If the house value drops, well at least you’ve got a place to live. It’s not the most daring plan, and you won’t get rich off it, but as mentioned, you’ll have a house to live in.
I’m sure that plenty will disagree with me though. There is certainly an argument that if you can borrow you should, as you open up the opportunity for leverage. (and bankruptcy too, but that’s a detail)
Just my two cents.
XBoxBoy
January 18, 2010 at 2:48 PM #503745streak
ParticipantThanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?
January 18, 2010 at 2:48 PM #503346streak
ParticipantThanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?
January 18, 2010 at 2:48 PM #504083streak
ParticipantThanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?
January 18, 2010 at 2:48 PM #503837streak
ParticipantThanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?
January 18, 2010 at 2:48 PM #503198streak
ParticipantThanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?
January 18, 2010 at 3:43 PM #503203patb
Participant[quote=streak]Thanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?[/quote]
Short Term TIPS,
Rates are so poor, cash isnt a bad thing.
Commodities are just awful no dividend stream
and won’t ever have one.with the excess CRE out there, it’s not a good time
to buy a rental quad unless it’s something you really really really know well.January 18, 2010 at 3:43 PM #503750patb
Participant[quote=streak]Thanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?[/quote]
Short Term TIPS,
Rates are so poor, cash isnt a bad thing.
Commodities are just awful no dividend stream
and won’t ever have one.with the excess CRE out there, it’s not a good time
to buy a rental quad unless it’s something you really really really know well.January 18, 2010 at 3:43 PM #504088patb
Participant[quote=streak]Thanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?[/quote]
Short Term TIPS,
Rates are so poor, cash isnt a bad thing.
Commodities are just awful no dividend stream
and won’t ever have one.with the excess CRE out there, it’s not a good time
to buy a rental quad unless it’s something you really really really know well.January 18, 2010 at 3:43 PM #503351patb
Participant[quote=streak]Thanks for your insight.
I guess that if I don’t want to be a landlord there is always the REIT option as part of a portfolio including bonds and equity.We can get up to 6% leaving the money in the bank here which during uncertain times is a viable option.
What do the risk averse folks with cash in the USA do, CDs?[/quote]
Short Term TIPS,
Rates are so poor, cash isnt a bad thing.
Commodities are just awful no dividend stream
and won’t ever have one.with the excess CRE out there, it’s not a good time
to buy a rental quad unless it’s something you really really really know well. -
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