Buying rental with cash vs financing.

[Karim Talbot]

First time getting into REI and my current plan is to buy with cash. Is that generally not a great idea?

Right now if I keep $340k in the bank at 4.5% I would earn $15471 in interest in a year.

If I use that to buy a house local to me, I would make approximately $22800 in a year after taxes fees etc. I have not taken into account any of the tax benefits just yet, but I know they exist. 

I run a company (that I have some equity in) and do not have a ton of time to spend on this, but would like to start diversifying and dip my toe into this. If all goes well, I can start looking at more properties down the road. 

I am looking to hold the property long-term.

Any thoughts on this would be greatly appreciated.

I do own our current home out-right and our only debt it a car payment on my wifes car. It's at 2.2% so why on earth would I pay it off. :-) 

Thanks in advance!