The Profit and Loss of Buying a Cash House

The Profit and Loss of Buying a Cash House

A house is the biggest asset that people generally buy in their life. Not surprisingly, many people can not afford to buy a house in cash. Therefore many people buy houses on credit. If you think about it, buying a house with cash can indeed be profitable. But is it 100 percent profitable?

Not necessarily. Because all options have their pros and cons. Risk is always behind all our choices. In buying a house in cash as well. First, the risk of the house does not match what is offered. For example, the house is in dispute, the house has been used as collateral for debt, or even the certificate is fake.

Therefore, usually the way to buy a house in cash is done with gradual payments. Not paid 100 percent up front. On the other hand, people use a cash house sale and purchase agreement. Because if there is a problem in the future, the buyer does not have to lose 100 percent according to the price of the house.

Second, by purchasing this method, it is clear that you need large funds. If you buy a house for Rp. 500 million, at least you have to prepare around Rp. 600 million. It’s not enough to just prepare a little over five hundred million. Because, other costs will appear. Such as Value Added Tax (PPN), Transfer of Name Fees (BBN), Cost of Acquisition of Land/Building Rights (BPHTB) etc.

But if judged from the side of luck there are several things. First, obviously, you are not in debt. Every month, you don’t have to bother with installment payments. Second, the house you buy, you pay at a cheaper price when compared to buying through a mortgage. Because, there are no administrative fees, insurance, and interest expenses that you have to pay.

Another advantage, if you buy a house cash from the developer, they prefer buyers with cash. Because this type of buyer benefits them because fresh funds can immediately flow without any business with the bank. However, the procedure for buying a cash house from the developer also needs to be considered. Make sure you check the developer has a good track record or not. Also, make sure the developer is registered with the association of developer companies. So that you have a reference to judge their quality. Keep paying in cash in stages and use a cash house sale and purchase agreement.

The fourth advantage, your house is directly in your power. If you buy a house with a mortgage, the bank will keep the certificate of the house as collateral. So, if you buy a house with cash, then the certificate is in your own hands. So, the house is also your asset. If you need funds, then you can make a loan guarantee to the bank. Or you even sell if you sell attractive prices.

Which one is profitable? Buy a house with cash or a mortgage?

There is no absolute right answer. Depends on your own condition. If you really have enough funds, buy it with cash. Make sure the purchase is made in a safe procedure and using a cash house sale and purchase agreement. But if you don’t have enough funds, and can’t ensure the legality of the house, buying with a mortgage is also not wrong. With the presence of the bank as a third party, it will also check whether the house you are selling is safe or not. This is because the bank only wants to finance the purchase of a house with a mortgage, if the house purchased is not problematic and is an asset that has value. The bank also made sure the house was built without violating any regulations.

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House Owner March 22, 2022 12 views
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