Income property, mortgage vs cash purchase

[streak]

We will be relocating to San Diego from South Africa with green cards later this year.

Until we find our feet we will rent in North County for a year or so before buying.

We will however have some spare cash and naturally no credit rating. We are thinking of buying some property, maybe a quadplex or suchlike as an income property.

Does it make sense buying for cash when we arrive or waiting to build up a credit rating and then putting down say 50% and financing the balance?

What kind of return can one expect on such an investment if you buy at the current market rate?

Thanks for the help.

[XBoxBoy]

It 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

[XBoxBoy]

It 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

[XBoxBoy]

It 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

[XBoxBoy]

It 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

[XBoxBoy]

It 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

[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?

[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?

[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?

[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?

[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?

[patb]

[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.

[patb]

[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.

[patb]

[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.

[patb]

[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.

[Author]

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