Fatwa #4092426 September 2018United States of America
Buying an investment property (for renting) using Islamic financing
Question
Aoa. Is it permissible to buy an investment property (for renting) using islamic/shariah financing ? (assuming that the bank is sharia compliant). I was once told my a local Imam that I should avoid islamic financing (when i was purchasing my own home) if I can (e.g., buy a smaller/cheaper home w/o loan, instead of trying to buy a nicer home with islamic financing)
Answer
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
If the Islamic/Shariah financing is Shariah compliant, it will be permissible to buy an investment property through that.
However, one should be alert that there are many banks/Islamic investment schemes incorrectly claiming to be Shariah compliant.
And Allah Ta’āla Knows Best
Mirza Mahmood Baig
Student Darul Iftaa
Jeddah, KSA
Checked and Approved by,
Mufti Ebrahim Desai.