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Not everyone needs a mortgage to buy a property. If you have the money to buy without a mortgage, what tactical advantages does that give you? Can you always secure a bargain as a cash buyer?

Is cash king for property buyers?

Strange as it may seem, the advantages of being a cash buyer are not all conquering.

One big downside of buying for cash is that you don’t get the benefit of leveraging other people’s money. Your cash does not maximise its possible advantages –  does not work as hard – does not buy as many properties as it could.

However if you are buying for cash, you can employ a number of tactics which make or save you money or increase your chances of being the successful bidder.

Here are some of the main tactics you can usefully employ…

1. The speed card

Not requiring a mortgage, which can take several months to obtain in a worst case scenario, you can sell yourself as someone able to proceed fast without the uncertainty or delay of a buyer needing a mortgage.

That is particularly likely to appeal to a seller needing a quick sale to avoid or minimise some major financial difficulty such as the risk of repossession, business failure or insolvency.

If you are able to target sellers needing to move fast, you will put yourself in prime position to reduce the price in return for a quick sale.


2. Buying off-plan

One risk of buying off-plan is not being able to secure a mortgage or having the mortgage withdrawn when the property is built and ready for legal completion.

As a cash buyer, you will have the money to complete and will not run the risk of losing your deposit or facing court proceedings to complete.

Where an off-plan property goes up in value greatly during the build period, the buyer can make a huge profit. 

As a cash buyer you will have the capability of making such huge profits, but you should remember that prices could also fall steeply during the build period and, in that case, you would lose money.


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3. Greater freedom

If you are buying a property as a home, most home loan companies will not be willing to lend to you if the property does not have a functional kitchen and bathroom.

Similarly, if you are buying a property to rent out, there are various circumstances where some lenders will not lend at all or will offer less than you need – perhaps forcing you to withdraw.

As a cash buyer, you will not be at the mercy of such decisions.

As a home buyer you may be able to secure a bargain price by buying without a kitchen or bathroom and add extra value later on by refurbishing the property.

As an investor, after refurbishing and increasing the value, you may be able to refinance the property – removing all or most of your money.

Though it may sound strange, having cash makes it easier for you to benefit from no money property investing strategies.


4. Probate purchases

As a cash buyer you will have a good chance of buying a “probate property” where the owner has died and the executors are typically keen to achieve a quick sale without doing anything to the property, regardless of its condition.

Not needing a mortgage, you will be well placed to bid successfully for bargain probate properties where cash buyers are often specifically sought.

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5. Auction purchases

Being a cash buyer gives you the opportunity to buy auction properties which are typically a lot cheaper than properties purchased in the normal way through estate agents.

You will have a lower exposure to risk and lower costs than bidders who need to borrow in order to buy. 

As an investor, you can engage on a risk-lite basis in the various profitable property strategies associated with auction purchases including BRR – buy refurbish and refinance.


6. Greater risks and greater rewards 

The norm is that greater property risks lead to greater rewards.

Having your own money enables you to play at the higher end of the risk-reward table – giving you the chance to gain the biggest rewards, assuming the level of risk is within your tolerance. 


Being a cash buyer gives you greater tactical options and opportunities. All things being equal, you should have a big advantage in getting the property you want and getting it at a bargain price.

Further, owning a property which is not mortgaged provides you with peace of mind and greater choice as to how you can use that property – practically and financially.

However buying for cash and not taking advantage of the benefits of leveraging can seem like investment illiteracy.

Have you ever been fortunate enough to be a cash buyer? Were you able to profit from your position of advantage? Please leave your comments below.

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Dalton Barrett
Rebel Property Coach

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