In real estate, this is an old argument – whether selling property is more profitable or putting it up for lease? While both have their pros and cons, in the long run becoming a landlord is more beneficial than selling your property immediately. And it is especially true because of the impact of the fluctuating economy on the real estate and job market. In fact, if you ask expert investors, most of their investments are towards regular income-producing properties (rental property).
Now, there might be situations where selling your property would seem like a more mindful option. For instance, if you are moving very far from your property or want to buy a new property. Additionally, it could also be to prevent fiscal losses you might incur if you are unable to find regular tenants or to cover monthly expenses through rents.
In case you are not dealing with any of these critical situations, it is always more economically beneficial to keep your property as a regular source of income. Here are a few points that will elucidate why owning a rental property is better than selling it in most scenarios.
Rental Income Cash Flow: Whenever it comes to the benefits of rental property, a regular source of income through rents comes first. While the benefits are alluring, property owners first have to deal with the overhead of finding tenants for 12 months a year. However, by choosing a right location with the right investment plan, you can be free of this worry.
For instance, if you are interested in investing in the Philadelphia, PA area than partnering with National Realty Investment Advisors can a highly profitable trade. The firm offers a 5 year rent guarantee with property management from their end.
Appreciation: In most cases with time the price of your property will increase due to land and property appreciation. If your property is in an area with stable economic development, then the profit margin will be considerable. To get a rough idea on how much your property will worth after a particular period of time, you can make use of free online tool provided by Zillow.com.
Tax Benefits: Whether it’s interest on mortgage payments or travel concerning rent collection and property management, as a property owner you get tax deduction on all these expenses. With rising taxes throughout the States, the money you save through tax deduction can make a significant contribution to your monthly rental income.
One of the best features of investing in rental properties is that the purchase can be made through financing. In other words, you can buy rental property by contributing only a fraction of its total value. And with that small investment you own the property and will earn the equity profits on it.
As mentioned above, in certain situations becoming a landlord is not a feasible option. But if you want to target huge and long term benefits then owning rental property is a far better and reliable option than selling it.