By retaining property, you will typically enables them to lease it out and take on the role of a landlord. This can provide a stable, second income or a primary career in the property industry. This article will take a look at both advantages and disadvantages of retaining properties and becoming a landlord.
Advantages of Being a Landlord
Since retaining property will provide a stable income stream, it can allow you to cover the costs of your investments and ensure that you are consistently generating much-needed cash flow.
There is also the potential for capital appreciation. Values of properties do tend to rise over time which will mean higher potential profits if you have the stomach and fortitude to hold out with an investment for a larger gain.
Retaining property delivers tax benefits too. For instance, you will be able to deduct expenses from your rental income and claim capital gains tax exemptions.
Disadvantages of Retaining Property
An obvious issue with long-term investments is that there is far lower liquidity. If you take on the role of a landlord or a landlord-developer, your capital can be tied up in a property for months or even years.
You will also be faced with higher maintenance costs including repairs and renovations. This can quickly eat away at your profits and take up a lot of your time.
Unlike flipping houses, as a landlord, you’ll also have far less control over your investments overall. You will need to wait for the market to improve if you do need to sell your property at any point. This also restricts you in terms of opportunities for portfolio growth. You can learn more about this by reading the best property development literature.
If you need help deciding whether or not retaining property is the best option for you, don’t hesitate to get in touch. John Howard is an expert property developer with years of experience on the market and will be happy to provide his insights.