Buying a Lawrenceville investment property with cash comes with a range of benefits. Although there are other critical things to take into consideration just prior to paying cash for your next rental property. Not having a mortgage payment is considerably irresistible. Your rental income could turn out to be very successful almost promptly without needing to factor in the mortgage payment. On the other hand, paying cash for a rental property doesn’t indicate you can keep from paying other expenses related to buying and owning an investment property. Read on to learn more about these and other important things to consider when buying a property with cash.
Benefits to Consider
First, the advantages. Other than having no mortgage payment, there are additional wonderful benefits to buying a rental property with cash. For example, sellers may be more interested to negotiate with a cash buyer, even accepting a lower price if you can guarantee immediate payment in full. With no mortgage approval process seemingly delaying the sale, a cash buyer can move through the purchase more excellently and eliminate the risk of loan denial.
One other benefit to think about is paying less over the long term for the property given that you won’t have any mortgage interest to fear. You may be able to save a bit of money on fees related to the appraisal, title insurance, and lender-imposed closing costs. And, because you will own the property outright from day one, cash buyers gain full, instant equity in the property that can be borrowed against or cashed out in due time. The thrill of a cash purchase is a sufficient cause for plenty of investors to opt-in.
Costs to Consider
Even supposing acquiring a rental property with cash has many advantages, there are also costs you will still be responsible for, despite the fact that you prefer not to finance your purchase with a mortgage. Take one example, while you may avoid certain loan-related fees, there will still be closing costs on a cash sale that you will have to pay out-of-pocket. These costs can correspond to as much as 3% of the property’s purchase price and include things like real estate transfer taxes, processing, and filing fees levied by the County Recorder, a home inspection fee, and so on.
Property taxes will equally at all times be an expense that owners will need to pay, one way or another. There may possibly be property taxes due at the time of the sale, and then there would be ongoing expenses that will entail being paid every year or twice a year accordingly. At any time, you can search a property’s tax bill online through a city or county website.
Some ongoing expenses that you can expect to pay related to your investment property include insurance, maintenance and repairs, utilities, and in some cases, homeowner’s association dues. Not to mention professional Lawrenceville property management to maximize ROI. These and all other disbursals of owning a property should be attentively researched and included when estimating your monthly cash flow.
To reap the benefits of buying a rental property with cash, be mindful that you’ll need more than just the property’s purchase price on hand. You’ll additionally need enough cash for closing costs, taxes, insurance, and the repairs you’ll need to make to get the property ready to rent.
At Real Property Management Citywide, we facilitate rent property buyers in searching for better deals and off-market properties. Whether you want to pay cash or finance your next rental, we can actually help! Contact us online to learn how.
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