Mortgage -vs- no mortgage

[J Romano]

I recently purchased a property that will be a vacation home, and vacation rental. I had planned on putting 20% down and getting a mortgage, but due to 6+ offers, I had to give a cash offer to get it done.  The cash amount represented ~65% of my cash (checking/savings).  Now, months later, already owning it free and clear, I'm finding it difficult to do a cash-out refinance to take out 80% of the value.  It's really odd when looking at it this "backward" way.  I plan on keeping the property long-term (10-15+ years).  The way I see it... this cash that I had will be tied up until I sell in maybe 15+ years.  I'd like to have access to the cash for possible real estate investment, more of a cushion in savings (at ~2%), to invest in stocks, pay for college (in 12+ years), etc....  Isn't it best to take this cash-out now, while rates are still low, vs being stuck later on when I may have to sell or refi at a high rate to access the cash?  I was thinking a 15 year fixed to avoid the interest.  

To recap... I fully intended on taking a mortgage on this property, but since I was forced to pay cash and now own it free and clear, it seems like it might be silly to just take out cash that may sit in a bank account paying 2% rate..which is where the cash was before I purchased the home.  Thoughts??

[James Galla]

My preference is a mix of free and clear properties and leveraged properties. Here on BP, though, people are all about overleveraging and BRRRRing until you have pennies in your bank account. So, whether you leverage the property depends on your portfolio's posture. If this is your first investment property and your debt to income ratio would be substantially impacted from getting a mortgage, perhaps you ought to keep it free and clear while you get the hang of managing it. Of course, that's the less risky route to take.