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Are You Planning to Buy Your Next Investment Property with Cash?

Man Holding Cash and Handing Over KeysGetting a Pearland investment property with cash comes with a range of benefits. However, there are other necessary things to go over before paying cash for your next rental property. Not having a mortgage payment is extremely tempting. Your rental income could advance to be very profitable quickly without needing to factor in the mortgage payment. Nonetheless, paying cash for a rental property doesn’t mean you can elude 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. Aside from having no mortgage payment, there are several splendid benefits to buying a rental property with cash. For instance, sellers may be more adaptable to negotiate with a cash buyer, even accepting a lower price if you can guarantee immediate payment in full. With no mortgage approval process surely delaying the sale, a cash buyer can move through the purchase more effortlessly and eliminate the risk of loan denial.

Several other benefits to really consider consist of paying less over the long term for the property on the account that you won’t have any mortgage interest to be anxious about. You may be able to save a small amount 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 when the right moment comes. The thrill of a cash purchase is enough probable cause for various investors to opt-in.

Costs to Consider

Notwithstanding that purchasing a rental property with cash has many advantages, there are also costs you will still be responsible for, even as you opt not to finance your purchase with a mortgage. By way of example, while you may avoid certain loan-related fees, there will still be closing costs on a cash sale that you will necessarily pay out-of-pocket. These costs can come up 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 moreover continually be an outlay that owners will need to pay, one way or another. There will be property taxes due at the time of the sale, and then there could be ongoing expenses that are required to be paid every year or twice a year henceforth. In many parts, you can find a property’s tax bill online through a city or county website.

Many other ongoing expenses that you can reckon 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 Pearland property management to maximize ROI. These and all other disbursements of owning a property should be completely researched and included when estimating your monthly cash flow.

To reap the benefits of buying a rental property with cash, call to mind that you’ll need more than just the property’s purchase price on hand. You’ll similarly 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 Prestige, we assist rent property buyers to make and find great deals and off-market properties. Whether you are decided to pay cash or finance your next rental, we can surely help! Contact us online to learn how.

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