pros and cons of buying property cash

Mickygg

A true cash buyer (cash available, no house to sell) has the big advantage of the chain stopping with them.

You may not necessarily get a better price than someone with a mortgage, but it may give you the edge over another buyer who has a mortgage and chain, more to go wrong.

If I could, I'd use cash to secure the house I really wanted, hopefully at a better price than those who need a mortgage but I think a lot of people would go for highest offer irrespective of cash buyer.

csgohan4

problem is when you discover your cash buyers needed a mortgage later down the line.

Hoploz

The benefit to buying with a mortgage is that you can put eggs in more baskets.

For example, if you spend 100k on one house, you see capital growth on the property and that is your profit. Perhaps it may rise over time to 120k, you've made 20k.

If you spend 10k on 10 properties, and mortgage the balance, you see a greater return. For example, 10 properties have all increased over time to 120k, this time you've made 200k (less your mortgage interest and other associated costs obviously.)

But if you are only buying the one property and are not interested in maxing your return, the benefit in the eyes of your seller is that you should complete the purchase quicker, as there is no delay from mortgage application and you won't pull out due to broken chain.