Cons: you will not be able to deduct any mortgage interest from your taxes, you will need to budget your insurance and taxes, as you will receive an annual bill for both. If you elect not to have a private appraisal, you may pay more than the home is worth.
The cons if buying investment property would be a lower rate of return on your cash. If you calculate your return using cash, then compare it to say 70% debt, in most cases you will have a better rate of return on your cash using debt. This in turn would allow you to purchase more properties. With a higher rate of return using leverage you would make more money with the same amount of cash. Your risk would also be spread over more properties. You also have the benefit of deducting the interest, further increasing your return. If you buy at a good price and the market keeps improving, you could also have the advantage of appreciation.
John D. DiPietro
Prudential Network Realty
Atlantic Beach Fl