Cons: you lose control of when payments are actually made. For example, the bank may wait until January to pay the local tax bill, and you are not able to deduct it on taxes until it is paid out of escrow. Also, time value of money, as already mentioned.
Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes
7y
@Tina Trussoni Personally, I like escrowing because it’s 1 less thing for me to worry about. However, there are benefits to not escrowing including the time value of money since you aren’t paying taxes early. I would recommend just using the escrow though.
Cons: you lose control of when payments are actually made. For example, the bank may wait until January to pay the local tax bill, and you are not able to deduct it on taxes until it is paid out of escrow. Also, time value of money, as already mentioned.