Multiple mortgages or mortgage free?

[Daniel Puglia]

My partner and I have made off with a pretty good payday after selling our ON primary residence, we are looking to deploy the cash into Eastern Canada where homes are cheaper. I am just curious if anyone has insight on the idea of using our cash to buy a place outright, no mortgage and then renting it for cashflow, using the cashflow for our next place/project or if it would make more sense to split up our cash and purchase say 2 properties with significant down payments and small mortgages, rent them out and aim to be mortgage free on both within 5 years(ish). Hopefully, I've explained the question properly, I am a complete novice, any insight would be greatly appreciated.

dan pugilia

[Chris Baxter]

Hello @Daniel Puglia. Welcome to BP.  One of the key benefits of real estate as an investment vehicle is the power of leverage.  If you buy a property cash, you'll have no debt service on it, but your growth is limited to / by only having one property. If you instead buy multiple properties, your net worth will grow more rapidly, as you'll potentially gain appreciation on more / larger properties.