There has been ongoing debate regarding the best way to recoup the investment made in constructing a residential apartment building. For those involved in real estate, where does the real profit lie? Is it possible to recoup the money spent on constructing a residential apartment building through renting it out, or is selling it a better option for recovering the investment?
You can make a profit by renting out the apartment and you can also make a profit by selling it. However, if you want to make a profit by renting it, it will take a long time but here you can make a higher profit than selling it directly. But when you sell it, will you get an immediate profit or with the investment capital. If you have the ability to be patient, then you can follow the renting thing because it will give you a lot of profit in a long process. And what you should do depends on what kind of investor you are
We must understand that all types of investment possess pros and cons even in the case of apartments. I regard renting an apartment as an opportunity since it is a good solution to the people who desire to experience long term gains and establish a permanent asset. You will enjoy steady cash flow of renter payments and your apartment may even increase in value in the long term. You, therefore, get a twofold advantage, cash flow of the rental and the possibility of increased capital gain in the future. At the same time, the sale of an apartment yields instant returns which may be utilized in other necessities or can be passed over to new investment.
I can understand that it is more appropriate to this kind of people who are willing to receive the fast payoff or in case they want to achieve the big amount of capital. As investors, we must evaluate ourselves, the kind of investor and the kind that is patient enough to wait over a long period of time to see returns or because the investor wants immediate returns. When the situation permits, it is a secure and sensible process to lease. However, in case you want to shift to the other opportunities promptly, the solution can be selling. Therefore, both choices are not so wrong, it is just a way we formulate our asset management strategy and our fiscal goals.
