Cash buy or finance?

[Kerry Bragg]

Would it be better to buy a rental with cash or finance and keep some cash for another rental?

[Brad Hammond]

Hey @Kerry Bragg, that is a personal decision based on what you feel comfortable with but I'll give you my take on it.  I like long-term debt so I would put as little down as you can.  That is one of the best reasons to invest in real estate.  If your property goes up in value by $25,000 and you put $100,000 down, you made a 25% gain.  If you purchased it for $400,000 and the property value went up $25,000, you only made a 6.25% gain.  Also, your tenants are paying your mortgage off for you, so if you can have more properties with tenants doing that, the better off you are. I also like that a mortgage is a hedge against inflation if you are worried about that at all over the next 10 years.  

If you are looking for a higher monthly payout, then I think paying all cash or doing a higher downpayment makes more sense.  Take a look at your goals but debt will help with long-term wealth creation and paying in cash will help with short-term cash flow.