Getting ready to purchase an SFR rental

[Patrick Roane]

Hey folks,
Quick questions for you. I have enough cash in the bank to purchase a small  2bd, 1ba SFR (already cash flowing/w tenant) outright. My question is, should I make a cash purchase so I can own it free and clear? Or, should I just take a fraction of money and put that towards a down payment and finance the rest with a 30 yr mortgage?

Thanks.
Pat

[Julia Lyrberg]

If you pay cash, you'll own it free and clear, which means instant cash flow and no mortgage to worry about. However, leveraging your money with a 30-year mortgage could give you the chance to buy more properties, increasing your overall returns and diversifying your investments. It really comes down to your comfort level with debt and your long-term strategy. If you're aiming for growth and can secure a low-interest mortgage, financing might be the better play. If you prefer less risk and immediate income, then paying cash could be the way to go.