Financing vs. Cash Purchase in General..
If I had $200,000 in cash, would you advise taking out three mortgages that positively-cash-flow over a 30 year period at 4.5% with no prepayment penalty, or doing one all-cash purchase? I go over this in my head like a dog chasing his tail. I might have that kind of money in 2014, and I was trying to decide what is safest and wisest. My wife is a bit more conservative than I am (as in, would probably be more comfortable with the one cash purchase). The area we live in and would invest in, by the way, is Charleston, SC which has seen about 2/3 of its loss in the recession back lately, and almost all indicators are that the State is financially ok and that the population is growing annually.
Most Popular Reply
The choice really depends on your goals and financial situation. Leveraging will create a much higher net worth long term, but won't produce as much income in the short term. I personally am in a situation where I am cash heavy, and wishing for early semi retirement, so I am buying in cash as much as I can afford, and living off the income. If I wanted to still work full time, I would be leveraging. I also prefer living debt free. It's a very personal decision and there is no right or best way to do it that fits all.