What is the best way to acquire rental property, pay cash or finance it? The house will be paid off in a few months. It was originally built in '09, and of course remodeled last year. We are looking to downsize into something smaller, and I am thinking about just paying cash for a condo so we can still be without a mortgage. Then we will rent this house out. I want to build up a few more rental properties. I have heard two different "schools of thought" for doing so. 1. Pay cash for them, that way there is no mortgage so you aren't on the hook for the payment if they aren't rented out, and so there is no interest. If you need cash later, you can always sell one of them. OR 2. Finance them, and keep your cash in hand. Let the renters pay the mortgage payment, so you aren't out any money. Then if you want to add additional to the principal every month to pay them off early, you can. Which is better? Or is there a 3rd option I don't know about? I don't necessarily like the idea of taking out mortgages for them. I don't like the idea of having my name on another long term loan. Even with adding to the principal every month, it will still take years and years to pay them off. But if it makes more financial sense for some reason, then I can go that route.