Which is More Profitable?

[GigaBit]

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 problem if the apartment is rented out and it is better if it is sold outright. However, the status of one's investment ability will be a key factor in taking such a decision. If I am a big investor then I can pay rent but if I am not then I have to sell because with that sale money I will be able to make new investments again. If one does this kind of business then definitely his investment amount will be very high. But in my opinion I will try to sell it outright rather than rent it. Because if I sell outright then later on I can buy another apartment and from there I will be able to withdraw my profit which can never be obtained by renting. Apart from that, I am also responsible for the apartment rent. It must be difficult to sustain that business with my rent as a real estate dealer.

[darkangel11]

You can always make more money renting than selling.   After all, you are providing a service.  If you are not interested in dealing with tenants, you can hire a rental agency to take care of everything for you.

Exactly, with the only difference that renting will extend the turnover period, while selling will get you paid here and now.
Usually it's easy to decide based on one simple difference. Can you make the money work now, or not?
If you, for instance, have an investment window that will expire in a year or two, you choose to sell. If all you need is money to build or fix another apartment, get a loan for that and do it with bank's money, while paying the loan by charging your tenants.

[Stalker22]

You can always make more money renting than selling.   After all, you are providing a service.  If you are not interested in dealing with tenants, you can hire a rental agency to take care of everything for you.

Exactly, with the only difference that renting will extend the turnover period, while selling will get you paid here and now.
Usually it's easy to decide based on one simple difference. Can you make the money work now, or not?
If you, for instance, have an investment window that will expire in a year or two, you choose to sell. If all you need is money to build or fix another apartment, get a loan for that and do it with bank's money, while paying the loan by charging your tenants.

Renting out property can definitely give you a regular income flow coming in.  But you gotta think hard about stuff before jumping into it and  local housing prices, mortgage rates, your money plans - that all matters big time.  There is no one size fits all answer here.  Comes down to what works for you and where you are at in life.  Its a complex equation, and the best strategy often depends on individual circumstances.

[Furious 7]

Renting out property can definitely give you a regular income flow coming in.  But you gotta think hard about stuff before jumping into it and  local housing prices, mortgage rates, your money plans - that all matters big time.  There is no one size fits all answer here.  Comes down to what works for you and where you are at in life.  Its a complex equation, and the best strategy often depends on individual circumstances.

This should be an initial consideration because after all when we look at business opportunities sometimes we have to look from several angles not just focusing from one point of view.
I agree with what you said where in the end even if renting out a house will have a pretty good impact on monthly or annual income but in the end we also have to realize that in the end things like this must also be seen several supporting factors such as prices and the situation that occurs in our environment in the end.
If it is indeed favorable for renting then it will be more worth it if in the end we do this business where renting out houses apart from us who remain the property rights of the houses we rent out, we also get monthly or annual income according to the rental contract, but when it is not very profitable because of several factors such as the price of houses that are still affordable and the habits of people who do not like to rent then it would be better to sell directly is also a good option because in the end the business always depends on the conditions in the market environment.

[SamReomo]

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 there's enough demand of buyers to purchase that apartment for higher amount then what was spent during the construction of the building then surely it's going to recover the cost of building and gives some profit to the owner of the apartment. However, if the buyers want to acquire the apartment for cheap rates then in such case renting could be helpful as the owner can sell the property later when buyers demand for it increases.

[shinratensei_]

Renting out property can definitely give you a regular income flow coming in.  But you gotta think hard about stuff before jumping into it and  local housing prices, mortgage rates, your money plans - that all matters big time.  There is no one size fits all answer here.  Comes down to what works for you and where you are at in life.  Its a complex equation, and the best strategy often depends on individual circumstances.

honestly for the people that have property ready to rent, just rent it and find out, eventually we'll figure out the equation, sometime it's not as bad as we think renting property.

yes things can get messy since there are matter such as communication with tenant that can be highly stressful and mentally exhausting but we'll eventually get used to it.
renting as far as I know is quite stable and profitable business that there's reason why all those landlords keep buying more and more property to rent.

[kryptqnick]

There's probably no right universal answer to this question. Some countries have a huge rental crisis, so you won't have a problem renting the property out for a good price, and you won't have you worry about having clients. In other countries, the rent might be cheap, or perhaps it's just a rural area or something and people don't tend to rent there. In that case, waiting for the right moment to sell can be a better option. Also, if a person is in no rush, why not do both? One can rent it out for a while and return some funds this way, and then sell it at some point to get another profit boost.

[Iranus]

There's probably no right universal answer to this question. Some countries have a huge rental crisis, so you won't have a problem renting the property out for a good price, and you won't have you worry about having clients. In other countries, the rent might be cheap, or perhaps it's just a rural area or something and people don't tend to rent there. In that case, waiting for the right moment to sell can be a better option. Also, if a person is in no rush, why not do both? One can rent it out for a while and return some funds this way, and then sell it at some point to get another profit boost.

This is the most complete answer. Although real estate is a potential investment field, it will depend on the situation of each country and each region and will have different needs for real estate. If OP is in a war zone, renting is not really feasible in this case, selling would be more beneficial. None of us here know what the situation is like where OP lives, what the demand for real estate is like there, so only he knows what is the best choice for him.

But if I were him and in my country, I would also make the choice that many people choose, which is to rent rather than sell because in the long run, it will bring better profits.

[Yatsan]

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?

Renting would be generating bigger amount in the long run and not to mention that you will still have ownership of the apartment. Downside is not getting the money in an instant but rather, years of rent from the tenants. I do view it as perhaps 10years of sacrifice of getting the ROI from the amount you used for construction and after that, it will all be profit and that's for a lifetime of a passive income. Well, selling it as a property will give you a faster profit from the amount you used, it will also allow you to build another one. Actually both are profitable for sure however, it depends on how would you prefer things when it comes on return of investment. If you're patient enough of things then renting it out is best but if you're the aggressive type of investor then basically, selling it will be best.

[CryptopreneurBrainboss]

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?

Renting gives cashflow while selling gives capital gain and since I'm a big fan of cashflow and how profitable this mode of receiving profit can be I'll have to say cashflow. Renting gives more profits as you go down the years but selling gives a fast profits that can be used to buy more properties, renovate and sell again. The profitability can differs depending on the people involved, there are some people that renting would be more profitable to while there are others selling will be more profitable to because of their contacts (people they know). Some relators are good at marketing their building and they get buyers that pays in full then they can repeat this again and again. If you don't have that connection, you shouldn't be selling but renting that give you profit without much efforts (more like hodling Bitcoin).

Renting also leaves you with the ownership of the building and you can sell later to make profits. Everything then rely on the location your building is located because that'll determine if you can sell the business in the future for profits because the area has appreciated in value and more people want to leave in the environment where the building is located.

[nelson4lov]

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'd say there is profit in both ventures, however, it depends on how soon you can get the profits. If you sell the real estate outright, you can instant profit and can recoup your initial capital but with rental, it would take a lot longer to even get back your capital, more than a decade actually if you begin to factor in repairs and renovations but the biggest advantage it has vs outright selling is the fact that when you recoup the capital, you can earn profits for many years, possibly a life time.

[ChiBitCTy]

Anyone who tells you A is better than B, and leave it at that, doesn't know what they are talking about.  There are simply so many factors that go in to play here it entirely depends. How much was spent, how much would you get in rent/how many units/what are the leasing terms/how much in taxes and on and on and on.  Also location is of course massive, in one part of the US all things being equal selling might make more sense, but at another part of the US say just 100 miles away, renting would make way more sense.  There's just no black and white answer here.

[Nalain420]

There's probably no right universal answer to this question. Some countries have a huge rental crisis, so you won't have a problem renting the property out for a good price, and you won't have you worry about having clients. In other countries, the rent might be cheap, or perhaps it's just a rural area or something and people don't tend to rent there. In that case, waiting for the right moment to sell can be a better option. Also, if a person is in no rush, why not do both? One can rent it out for a while and return some funds this way, and then sell it at some point to get another profit boost.

I think that depends on the of opportunity. Sometime you have opportunity to sell the property at good price and you should sell tge residential property if you got good opportunity and you have great deal on the other side. Your mission should be grow your wealth,no matters you are getting fare from property or you are selling that. But I think getting fare in best option if you want stability and you have good residential property and you don't have to prepare for next tenant. If you are living in a big city then you will get more fare and from the fare you can buy next property from the fare because you can save it and you can place that money in the side.

[Roseline492]

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?

In Summary everything you have listed has a great chances of generating profits, however with the economic growth of most places real estate is a very lucrative business to venture into because there are so much profit in it especially for those who focus on building houses and selling them to a client but however just as the name implies to go into that business requires a lot of capital on a very large quantity because those are the things that would guarantee your success, however there are also people who focus on buying lands and selling it when the price has gone very high because I have a friend who are into that business and she made a lot of money from the lands she bought seven years ago.

[STT]

Renting is always the greater profit but also the larger amount of work arguably.   You have far more business risk in renting then a simple outright sale of the property, also you have to consider you will remain invested for an undetermined time in some markets it could be 20 years for a full cycle.

    Land and housing can lose value, if you have capital at risk its quite straightforward that the returns have to be higher just to justify that ongoing involvement.

I would choose renting if you have the choice, however for most people leaving capital unavailable in the property would not be suitable.  A large part would be your credit available and also the cost vs the yield obtained via renting.

  IF you can arbitrage a profit then why would you not, ideally your tenants are not cyclical in the economy but regular and reliable; an empty property is a bit of a disaster as I understand it.

[WillyAp]

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 should seek financing for your apartment building.  In the US its quiet easily done when well connected.
Outside the developed world it is quite different. And you depend more on the policial situation plus the existing society. Financing is possible but not as easy.   

[serjent05]

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?

In real estate, I think profit lies in the mark-up.  Each item and service has mark-up.  This is also the reason why the main contractor can easily give the tasks to the subcontractor.  They don't only get a cheaper terms for services, they can also gain extra time to accept another construction deal.  This is if you are a real estate developer.  

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?

This will not only recover your investment, renting the house can also give you a long-term profit since houses are made to stand for decades of years let alone the rental price of a unit appreciates every year.

Whether to sell your unit or to rent it out to recover your money is your decision.  Both are a good way to recover money, but if you do not need an immediate fund, I think renting out the house is way better than selling the house.

[junder]

Renting out property can definitely give you a regular income flow coming in.  But you gotta think hard about stuff before jumping into it and  local housing prices, mortgage rates, your money plans - that all matters big time.  There is no one size fits all answer here.  Comes down to what works for you and where you are at in life.  Its a complex equation, and the best strategy often depends on individual circumstances.

honestly for the people that have property ready to rent, just rent it and find out, eventually we'll figure out the equation, sometime it's not as bad as we think renting property.

yes things can get messy since there are matter such as communication with tenant that can be highly stressful and mentally exhausting but we'll eventually get used to it.
renting as far as I know is quite stable and profitable business that there's reason why all those landlords keep buying more and more property to rent.

I myself think it seems better to rent it out than to sell it, because by renting it out of course we will have a consistent income at every payment time for the tenant and maybe this can last a long time. although indeed by selling it which may seem more profitable but it may not last long because we know when we have a lot of money there is always the temptation to spend it without good consideration. for example I have a housing that is ready to be occupied I will look for a tenant for the house because a stable income must be considered.

what you said is right, things can indeed be complicated even though renting it out does not mean there will be no problems because no one knows when problems will occur. but we ourselves have choices and must consider them very well and I think that has become a must for everyone. in my opinion people who think long term rent out something they own, because by renting it out it can make them get income that can be said to be long term.

[retreat]

I think that selling apartment units is more profitable than renting them to tenants. The reason is because when developers design their buildings, they already have a calculation of how much capital and profits they will get when they successfully sell apartment units to buyers. And they can also get fresh money that can be turned back to pay debts or build another apartment to make more profits. That's as far as I know, because apartment developers in my country never rent out units to tenants, but they sell them straight away, then these buyers can choose to occupy it or rent it out.
However, perhaps the problem is that when developers sell apartment units, this means they may lose the stable income from renting apartment units, and they will only expect the apartment fees paid by buyers every month.

[BABY SHOES]

Selling or renting is equally profitable but by selling the property after it is built, your money will return faster in the sense that you can turn the business around.

If I have capital in the property business, I will build in a strategic place with a busy location, say the city center, it will be better to rent it out than sell it, this is a long-term profitable business.

I have a friend with and several properties that he owns, he said it is more profitable to rent out than to sell not necessarily find a strategic place again.