The model of real estate investing and managing is DON’T SELL! Instead, you should refinance, create value, and fix up the property. And then do it again, and again, and again. You can even do it on a smaller scale; even one apartment or one house. Just start.
If the property has actually gone up in price, you can refinance it. As long as you take that refinanced money and roll it into the next property. That’s the way to build wealth in the real estate industry.
Here’s more on why you should hold property instead of selling it.
One of the primary advantages of holding onto property is the potential for long-term appreciation. Real estate has historically proven to be a valuable asset that tends to increase in value over time. While there may be short-term fluctuations in the market, the general trend in real estate is upward. By holding onto a property, individuals can benefit from capital appreciation, allowing the value of their investment to grow over the years.
Another benefit of holding property is that it provides you with the opportunity for rental income, and a steady stream of money coming to you. This can be particularly advantageous in areas where rental properties are in high demand or in locations where property values are rising. Rental income not only helps offset the costs of property ownership, such as maintenance expenses, property taxes, and mortgage payments, but it can also contribute to a reliable and consistent source of passive income.
Here’s a big one: holding onto property allows individuals to take advantage of tax benefits. In many jurisdictions, property owners can benefit from numerous tax deductions, such as depreciation allowances, property tax deductions, and mortgage interest deductions. These tax incentives can significantly reduce the overall tax liability associated with property ownership, making it a more financially attractive option in the long run.
Another important consideration is the potential for using real estate as a hedge against inflation. Real assets, such as property, have historically shown resilience in the face of inflationary pressures. As the cost-of-living increases, so does the value of assets like real estate. Holding onto property can help safeguard against the corrosive effects of inflation, preserving wealth and maintaining the purchasing power of the investment.
Additionally, holding property provides stability and security. Unlike other forms of investment that may be subject to volatility, real estate tends to be a relatively stable and tangible asset. Owning property can provide individuals with peace of mind, knowing that they have a physical asset that retains value and can serve as a source of financial stability in times of economic uncertainty.
In conclusion, holding onto property instead of selling it can be a smart and lucrative decision for a variety of reasons. Whether seeking long-term appreciation, rental income, tax benefits, protection against inflation, or a sense of stability, holding onto real estate offers several advantages. While selling may provide immediate cash flow, the potential benefits of holding onto property make it a compelling option if you have a strategic and patient approach to investing.