Why it May Not Be a Good Idea - Buying Real Estate Without Putting Any Money Down
There have been cases of landlords owning more than 25 investment properties who rue the day they decided to go in for such investments and now think that it may not be a good idea to buy real estate without putting any money down.
While the exception does not make the rule, it is wise to consider the pros and cons of buying real estate without putting any of your money down.
Some of these are discussed below: oNot having to invest any of your own money in a venture and yet be the owner / proprietor is a dream come true.
On the flip side, this would mean that you are living on borrowed money that has to be paid back, with interest.
So, do realise your financial capacity, because exceeding it will land you in a debt trap.
oThis type of investment allows the investor to become the landlord of multiple properties and the rental income itself should take care of all his business as well as personal needs, leaving aside an amount as profit.
All this is feasible, provided you don't have an abnormal number of vacant premises, most if not all the tenants pay their dues regularly and the rent amount is enough to cover all the expenses, mortgage payments, interest, etc.
and still leave aside enough to show a profit.
However, such rosy pictures are rare and every landlord faces hassles on each of these fronts at regular intervals, whether the tenant is a high profile individual, a sound business or lower income families barely able to make ends meet.
While the exception does not make the rule, it is wise to consider the pros and cons of buying real estate without putting any of your money down.
Some of these are discussed below: oNot having to invest any of your own money in a venture and yet be the owner / proprietor is a dream come true.
On the flip side, this would mean that you are living on borrowed money that has to be paid back, with interest.
So, do realise your financial capacity, because exceeding it will land you in a debt trap.
oThis type of investment allows the investor to become the landlord of multiple properties and the rental income itself should take care of all his business as well as personal needs, leaving aside an amount as profit.
All this is feasible, provided you don't have an abnormal number of vacant premises, most if not all the tenants pay their dues regularly and the rent amount is enough to cover all the expenses, mortgage payments, interest, etc.
and still leave aside enough to show a profit.
However, such rosy pictures are rare and every landlord faces hassles on each of these fronts at regular intervals, whether the tenant is a high profile individual, a sound business or lower income families barely able to make ends meet.
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