Should you use your own money or a loan to buy a home you intend on fixing up and reselling?


by lilla , in category: Real Estate , 4 years ago

I know this is something plenty of people do. They buy homes really cheap, fix them up over a year or two and then resell them for a nice profit.

My question is, when doing something like this, is it better to use your own savings or to get a loan?

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5 answers

by alexander , 4 years ago

I think it is best two use both. Most people don't have enough cash laying around to cover both the cost of buying a home and repaired it. I would say to use the loan to buy the home and pay for the repairs out of your own pocket though so you can pace yourself.

by derrick.frami , 4 years ago

Both if possible. I agree with the comment above about using your own money for the repairs because you can always take time off from that, you can't take time off from paying off a house.


by luther , 4 years ago

I'd also suggest both. Unless you have lots of money to spare, a loan makes sense.

As I'm sure you're aware, the more loans you pay back on time the better rates you'll get which only increases your profits further.


by pink , 4 years ago

Why not both? You can use the loan to buy the home and use your own money to fix it up. I think that is the best way to go about doing this.


by ollie , 4 years ago

You could do whichever you like.

Use your own money if you can afford it. A loan has interest which cuts into your profits but they can be nice to take away some of the sting from a big investment.