Hey guys my name is Masud and in today’s video I’ll be answering if you should buy your house outright or use a mortgage?
That’s an interesting question and I would like to say that you should use a mortgage.
Some people might object and say that a mortgage isn’t good or it is debt or it’s bad because you have to pay interest on it but it’s the only way to really make your money go further.
And I’d like to give you guys one example which explains my way of thinking.
Investor 1 decided to buy one house that was worth £100k and rented each month for about £500.
(We're not including expenses to make it simple)
Investor 2 decided to use their £100k and put down a £25k deposit on four houses all of which rented for £500 per calender month.
If we evaluate both investors, it seems like investor 2 would be the smarter one since they benefit from more rent each month and they also benefit from the capital growth of 4 houses.
That makes it clear to me what I would do but I'd love to hear your take on it.
