Which Is Better: Buy A House In Cash or In Installments?

The idea of ​​owning a house/apartment is the prevailing idea in Egypt as it is considered a factor of security for many people, hence people with a limited income have the motivation of owning an apartment, submitting a request for having a loan, premiums, cash, or buying a plot of land to build on it and so on.

Each one of us has plans, priorities and ideas in which he depends on to determine the appropriate way for him to own a house. The ways are different, but the goal is the same. How to determine the way that is best for you and the advantages and disadvantages of each of them to buy a house, whether in cash or in installments?

This is what you will learn about in this article

Cash Payment

Buying a house by this way requires having the entire amount of money or at a rate higher than 50% of the price of the apartment in order to get the advantages of buying in cash, in contrast to premiums or buying in installments.

Cash Features

• Investment

Real estate is one of the most reliable types of investments in Egypt. It is an additional source of income through rent or through the sale of the owned property as the real estate price increase from 4-6% annually (varies by the region and services)

• Stability

Immediate delivery is one of the most important advantages of cash payment. It would be a great advantage if you have a large family and children and you need stability, or if you are looking for a place of residence near your work or places of study.

• Home Free Disposal

Owning a home gives you the full opportunity to dispose of it as you wish. Certainly, it gives you the opportunity to provide a budget for renewing the purchase of the house in cash payment.

Disadvantages

• Maintenance expenses

Being obligated to pay the periodic maintenance expenses of the real estate from the time you own it, such as plumbing, electricity, etc.

• Fixed assets

Buying a house in cash is one of the most reliable types of investments in the long run. However, in the case of moving to another house, you will need to sell it because your money assets are fixed which requires time, effort and following-up.

• Spending more money

Paying money at once makes things lose balance in your life, especially if this is your only available savings, so it becomes difficult for you to invest anywhere.

Paying in Installments

Advantages

• Suitable if your money is not available at once

If your dreams are to buy an apartment, but the price stands as an obstacle between you and your dream, Paying in installments is the best solution for you in this case. It helps you achieving your dream with monthly or yearly payments or installments in the agreed period in proportion to your budget and potentialities.

• Flexibility

Unlike ownership in cash payment way, there is flexibility in agreeing on the period in which the installments are paid and completing the sale process according to the desire of the seller and the buyer so as not to spend a lot of your money.

• Open budget

Unlike cash payment, there is an opportunity to invest in any other project and you can merge your free and unfixed assets into more than one field with keeping the payment of installments and premiums on time.

Disadvantages

• A period of money instability

Anxiety may control the situation, especially if you do not have the required funds for each installment.

• The Difficulty of selling

If any emergency conditions occur, you will, in such case, need to find a buyer ready to complete the installments and payments.

• Interest Rate

In some cases, an interest is added to the real price per meter in the case of installments which increases the price of the unit or the house.

• Missed opportunities

The seller may resort to choosing the installment system due to the difficulty of selling his unit for its defects (for example, the area is not vital)

 

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