Is Paying Cash for a Rental Property a Good Idea?

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Keep reading to learn the benefits and drawbacks of paying with cash, what cash on cash return to aim for, how much cash flow a rental property should bring in, and more.

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Is it Better to Pay Cash for a Rental Property?

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Cash on cash return is the calculation of yearly before-tax cash flow as a percentage of the total amount of money invested. It’s expressed as a percentage.

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How Much Cash Flow is Good for a Rental Property?

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In real estate investing, the 1% Rule states your monthly rent should equal a minimum of 1% of the rental property’s purchase price.

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The 2% rule uses the same idea as the 1% rule, but this rule says a rental property is only a good investment if the passive income every month is equal to or higher than 2% of the original purchase price.

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