hi

Heard my uncle (70 years old, whats his max loan tenure?) cash buy a property with 1.5 mil cash.
I remember its not worth buying with cash, even factored in discount received with cash buy, interested saved etc as money depreciate over and need to calculate inflation as well.
Any experts can explain in details with assumption?
Thanks!

This post has been edited by Artlinenow: Nov 16 2017, 01:07 AM

1. Too old, to get loan. Unless his kids (with salary or biz income acts as a guarantor)
2. It's not true, not worth buying in cash. It's simple.

If you have RM1.5million and take a loan on it, the interest on it is say, 4.5% p.a.
Unless your uncle is able to invest in something that gives a return higher than 4.5% p.a., it's better to pay in cash.

Just keeping it simple.

At the age of 70, I don't think any financial institutions are sane enough to provide any banking facilities to your uncle UNLESS of course there are tonnes of collateral being provided so buying cash is possible.

I don't remember hearing people saying buying real properties with cash is "not worth it" however buying cars with cash is, simply because the latter depreciates annually, this would mean, you are losing money in your "capital" and also "interest" to the Bank. It is like money flowing out both ways.

More so if your car gets stolen, your insurance will only pay your insured value which is not much.

Depending on the kind of real property that is being purchased, what you heard cannot be applied generally.

Unless you are an aggressive investor constantly on the market hunting for properties then buying with cash isn't necessary a bad thing. Of course, people now assume that since money is depreciating in value hence the RM1.00 in 2018 is lesser than RM1.00 in 2017, when you pay your loan in 2018, you actually "earned" because you are paying the Bank "less value" but essence, it does not work in such simple maths XD