Which is More Profitable?

[Questat]

Both can bring decent profits. If you want to have quick and instant profits, selling the property would be the best option, of course with the best price offer. However, if your goal is to establish a passive income for long term, renting the property would certainly give you what you aim for. Although it will also demand higher amount of maintenance, but in the end the passive income you will earn is definitely bigger than its maintenance amount. So it’s certainly a win-win for you.

[Rruchi man]

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?

What is to be considered is the duration within which the investor in real estate wishes to recoup their investment.

If it is an investor who has invested in real estate and is expecting to get his profit really quickly, then selling off the apartments can be a very good way to do so. But if it's an investor who is seeking a sustainable and continuous stream of income and is not bothered about quick returns, renting for a period of time becomes the most appropriate choice for them.

[ajiz138]

With the property that has been built, of course it will cost a lot of money after all the residences are completed, the owner will definitely rent out because this is for the sustainability of future profits, if it's a matter of talking about turning capital, of course it takes a few years but after returning the capital back then you will get the benefits of rent that continue to flow every year.

Selling property, of course, you will get your investment capital back faster and can build other businesses because the turnover of money is faster too, it's just that these are two sides that have different benefits, everyone will definitely have that goal.

For me, I would rent rather than sell because that's what we have been thinking about for a long time and we will always get profit every year.

[Hatchy]

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?

On a norms, both will be profitable it's just like long term and short term trading. Selling of the house would yield you a huge amount more than what it was built with in a short period of time. But then if you rent of the building and hold, it will yield you even more than that which you would have sold off. That because a building can stand for more than 5 years before needing a renovation. And upon renting, you will annually receive rent for that five years giving you a sure and reliable source of income for this period where you don't have to renovate. For me I'll go for rent.

[Findingnemo]

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?

Buy a land, build a residential property and then sell it for x amount looks small but it will take ages and trust me it needs skill and experience to sell especially real estate so if you have been already in the brokerage then you can consider doing it or else just better rent them and make passive income.

Meanwhile both are not great choices as an investor because the growth and ROI is too small compared to stocks or other volatile investment.

[Davidvictorson]

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?

Now let me just trying my best with my small experience then, let me start with renting; in Renting the profits minimal like it doesn't have a stable and sound profits, reason is that in rentage when you spent a total amount of 50M to construct a building after which placed it on rentage it could cost you a total of 20-30 years to cover the cost spent in that building depending on the amount fixed at annually / Quarterly (Monthly/yearly), maybe it could around 500k per apartment then multiple by total apartment in that building, let say 5 apartment... 500,000 x 5 equal to 2,500,000 per year, then we subject it to the total amount spent in constructing the building.. 50,000,000 / 2,500,000 = 20.

Meaning it would take you 20 years to recover the amount spent in constructing a building with 5 apartment, after which your profits continues and it's a lifetime investment, but this depending on your age. If you are already 50 year old when you have that building, before you recover the amount it could cost you a total of 70 years which you are already weak (50 age + 20 years). So the investment is for your children and not yours.

Now, selling a building, if you spent 50m in that build you may decides to sell it at 70m-100m meaning you made your profits instantly without having to wait for lifetime to recover your profits, and off course you can always construct another building to sell, maybe within 20 years of your life have succeeded making 30m x 20 =600m within 20 years.

In Summary selling a building is more profitable than rentage.
I don't know if this is actually what you mean or not

YES.
My idea is not to make passive income initially. At least you cannot call it passive income until you have recovered all of the money spent on building the apartment. And like most real estate guys have adviced which is the same thing with what you have said, it will take many years to recover your initial investiment in building the apartment if you put it out for rent. Their recommendations are two-folds.

- if you are building to hand over the property to your kids and their kids then there is no problem putting out the property for rent.
- If you want your investment back in the shortest of time build and sell. You'll get both your investment and profit back and you can move unto your next building project.

[Viscore]

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?

Now let me just trying my best with my small experience then, let me start with renting; in Renting the profits minimal like it doesn't have a stable and sound profits, reason is that in rentage when you spent a total amount of 50M to construct a building after which placed it on rentage it could cost you a total of 20-30 years to cover the cost spent in that building depending on the amount fixed at annually / Quarterly (Monthly/yearly), maybe it could around 500k per apartment then multiple by total apartment in that building, let say 5 apartment... 500,000 x 5 equal to 2,500,000 per year, then we subject it to the total amount spent in constructing the building.. 50,000,000 / 2,500,000 = 20.

Meaning it would take you 20 years to recover the amount spent in constructing a building with 5 apartment, after which your profits continues and it's a lifetime investment, but this depending on your age. If you are already 50 year old when you have that building, before you recover the amount it could cost you a total of 70 years which you are already weak (50 age + 20 years). So the investment is for your children and not yours.

Now, selling a building, if you spent 50m in that build you may decides to sell it at 70m-100m meaning you made your profits instantly without having to wait for lifetime to recover your profits, and off course you can always construct another building to sell, maybe within 20 years of your life have succeeded making 30m x 20 =600m within 20 years.

In Summary selling a building is more profitable than rentage.
I don't know if this is actually what you mean or not

YES.
My idea is not to make passive income initially. At least you cannot call it passive income until you have recovered all of the money spent on building the apartment. And like most real estate guys have adviced which is the same thing with what you have said, it will take many years to recover your initial investiment in building the apartment if you put it out for rent. Their recommendations are two-folds.

- if you are building to hand over the property to your kids and their kids then there is no problem putting out the property for rent.
- If you want your investment back in the shortest of time build and sell. You'll get both your investment and profit back and you can move unto your next building project.

Now at least you made it clear for us that you prefer more selling than renting it out. I believe we all have different perspectives on that.  Selling would give you more satisfaction if your end goal is to make a huge profits on it. But if I were to asked, there's no wrong also with having an apartment for renting as long as you don't need the profits at an earliest time possible, since renting takes a lot of time before you will recover your capital and make consistent and sustainable profits.

[red4slash]

In the country I live in now, there are still many people who do the first option where they build a house and rent it out instead of building for resale at a relatively higher price. Although the second option still exists, if you look at the current conditions in my area, of course more people are building and renting it out because the benefits are much greater.  This is a natural thing here because seeing from the price of a place that is still quite cheap and a lot of people who still don't have their own place to live and prefer to rent, making the opportunity to take advantage by renting out a house will clearly become more lucrative.

But of course in this case it depends on where you also live because in the end this will determine which benefits have greater potential to be an option considering that different places or regions must also differ in people's thinking so that this will clearly affect business choices whether building houses for rent or building for resale at higher prices .

[mirakal]

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?

What is to be considered is the duration within which the investor in real estate wishes to recoup their investment.

If it is an investor who has invested in real estate and is expecting to get his profit really quickly, then selling off the apartments can be a very good way to do so. But if it's an investor who is seeking a sustainable and continuous stream of income and is not bothered about quick returns, renting for a period of time becomes the most appropriate choice for them.

Exactly, it depends on how the investor itself would want to gain his profits, be it short term or long term. But nevertheless, both are still profitable but it only differs on time. One will make instant profits just by selling the real estate once he finds a good buyer, or if he chose the long term profitability, simply renting it out will serve a better option.

However, if the investor is in need of real quick money, selling the apartment would provide him quick huge returns. As long as he'll find a potential buyer, the transaction will be smooth and fast.

[Distinctin]

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?

Both will recover the future investment returns in time. Having an apartment is a very profitable business, so either you sell it immediately or make it a rental business, both will actually offer you great profits.

Now, the question is if you want the long term process of the faster one. Because if your goal is to create an instant profits so you can proceed to your next investment, then sell the property with a good price. Renting the property will only lengthen and prolong the accumulation of profits.

[Mame89]

In fact, both methods can be equally profitable, it just depends on your goals and needs in making decisions. If you really need a lot of profit in a short time, maybe selling some of it could be your choice. However, if you really intend to earn passive income, it is better to rent it out. So it could be said that these two methods can get back the investment funds that you have made in the apartment investment, but it is up to you whether you want it in the long term or in the short term.

Because basically property investment is very profitable, even though the maintenance costs are also large, it is worth it because usually property prices will increase every year. Investing in property can change your future too, especially if you can also invest in bitcoin, that's even better.

[maydna]

If they want to make money fast, they can sell it to the potential buyer but that will not easy to find the buyer especially in this situation whereas the economic situation is slow to be better. They can renting out the apartment for some term before they decide to sell it especially if they don't have potential buyer. That will gives them money for some period while they search the buyer who wants to buy the apartment building. That solution can be apply if they difficult to find the buyer and I see some people who have a residential or apartment choose to renting out their property for some time.

That gives them money and recovering the investment although slowly but they can sell it directly when they gets the potential buyer who wants to buy their property.

[Don Pedro Dinero]

- if you are building to hand over the property to your kids and their kids then there is no problem putting out the property for rent.
- If you want your investment back in the shortest of time build and sell. You'll get both your investment and profit back and you can move unto your next building project.

As you have been told, both can be profitable. But I would qualify that they have to be profitable, at least on paper, otherwise you are doing something wrong.

As you say, if you sell all the flats what you are doing is recovering the money you owe the bank (because I assume you are going to ask for a mortgage) and the profit faster. If you rent them out you will owe money for longer, you will have more headaches with the tenants but you will have a monthly cash flow and at the same time the property will tend to appreciate in value over the years.

But here is the thing: the builders where I live do it in a mixed way: they sell most of the flats to recover what they owe the bank and make a quick profit but they keep a few flats and above all the commercial ground floor flats to rent them out. That way you can have your cake and eat it too.

[barisbilgili]

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?

I think renting it out or selling it is the same, it all depends on our desire to return the capital, whether we want it quickly or slowly, but there are advantages and disadvantages to each.
We can sell it to get back capital and profits so we can do the same thing in other places to get more profits and renting it out can become our fixed asset for the future and create a fixed asset for ourselves, so that's the same profit we get. It all depends on our individual choices.

[TastyChillySauce00]

Profitable depends on the location.

if there are very few tenants around the region of your property then maybe selling it is a good way to make profit, but if there are many industrial complex, offices and so on around your building then you can always get that long term profit and passive income and mitigate the risk because as far as I know, selling property isn't like flipping your hand, it's so hard with the people's average salary becoming less and less capable to afford current housing prices.

definitely try to take a look at the average salary of that region, average housing prices, and average renting price, it'll be a good insight to make decision on this.

[lovesmayfamilis]

If you consider all the costs of maintaining the property in good condition while renting and compare what you can get for selling this property, there may be a clear indicator of profit or not. I know that when renting, the landlord takes all the trouble for the working condition of the housing in my country, and the tenants sometimes drive apartments to the point of disgrace, which takes a very long time to restore. But yes, if you are picky about renting and renting out housing to normal clients, then passive income will be more profitable for renting, and it is natural that at some point the housing can be sold.

[Jody.Drummer]

In my opinion, both can actually be profitable, when you sell it means you immediately get back the money you have spent on building the apartment building along with a number of benefits, while when you choose to rent it out to someone else there is an opportunity for You can get a bigger profit compared to selling it directly to someone else.

The difference here is only in terms of time, because of course the cost of building an apartment is not small, meaning that when you choose to rent out rather than sell it means you have to be patient to wait several years or maybe decades until all your capital money is returned, and after Only then will you get real profits from renting out the apartment when all your capital money has been returned, and also if you rent out the apartment for longer then of course your profits can also be bigger, in the sense that renting out is an idea for getting long-term profits compared to selling it. , but I understand that not everyone is really able to be patient for that long, and if the choice is which is better, selling or renting, of course it depends on your choice.

[el kaka22]

It also depends on what you want to do later on as well. Are you planning on growing even bigger, or are you planning on considering that as your retirement? If you think that having that and renting it out would give you enough money to never work again and just retire and not need money, then you could just rent them out, sit at home, sip some tea and chill.

That way you would be a retired person, and can even do this at a very young age, so you would have a whole life ahead of you to relax, I have a friend at 38 years old who does this, has a building, rents it out, and doesn't work a single day in his life, only spends time playing games, taking care of his kid and enjoys life.

Whereas, if you want to grow, you could sell it to make some profit, buy another land, build another, and keep doing that until you feel like you have enough money, or do it until you can't anymore. That way, you will not retire, but you will "try" to be richer with that option. That is why I honestly believe that we should first know what our goal is afterwards.

If you know your goal afterwards, you could always pick easier, and also if you decide that you picked the wrong one then you can always switch back to other option later on.

[Fortify]

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?

There is no single correct answer to this, as it depends on thousands, if not millions of different parameters that are constantly changing. Most people will evolve their own unique strategies over time and seek to capitalize on a certain method, builders often have no interest in renting out the end property because their trade is construction and that's what they are good at. Real estate companies with a property portfolio might have good connections with builders, if only because they need maintenance skills, but are usually focusing their time purely on managing and adding to their existing properties without getting involved in building. What they do both need is to be delivering at an affordable price for the local market they are focusing on, because some people jump in and ignore that key fact.

[Huppercase]

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?

If you ask me, I will say the selling it out is the best and safe for your capital. Imagine building an estate large to accommodate people, you did everything and put everything in order and then rent it out for people to have. There is no way you are going to get all people to rent those buildings at the same time, if you are lucky they get filled up quickly and if you are not, it will b gradually and that will make your money to be slow before you get back your investment.

Secondly, constructing and selling out means you are some for that deal and you see your profit quickly but when you rent out, you will be the cost of maintenance and other miscellaneous spending later in the future. This might take extra years 10-20 years before you make back that money. The only advantage this might give is that you can later sell out the property and the land after some years but this isn't the best way to make money in Real estate business, just construct and sell quickly for people.