Are you contemplating selling your long-term rental property? While selling might seem like a straightforward option, there are several compelling reasons to continue leasing your property.
Here’s why maintaining your rental could be a more profitable and strategic decision in the long run.
Higher Tenant Retention Rate
One of the advantages of leasing your property through a reliable property management company is the higher resident retention rate. At SPM, we pride ourselves on our ability to maintain high resident satisfaction, resulting in fewer turnovers and more stable rental income for you.
Our proactive management strategies ensure your property remains attractive and well-maintained, keeping your tenants happy and loyal. According to the National Multifamily Housing Council, the average turnover rate for rental properties is around 47%. At SPM, our retention rate significantly outperforms this average, currently around 68% retention, providing you with consistent occupancy and income.
Annual Rent Increases
Annual rent increases provide a consistent growth in your rental income. With our expertise in market analysis, we ensure that your rental rates are competitive yet profitable, maximizing your returns year after year.
By leasing your property, you can benefit from this upward trend and secure increasing income over time. This gradual increase can significantly boost your overall revenue, especially in markets with rising property values and rental rates.
Current Market Conditions Favor Rentals
In the current market, high interest rates on new mortgages make buying a new property less attractive. According to recent data from Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage is over 6%.
This means more potential tenants are looking to rent, increasing demand for rental properties like yours. By leasing your property, you can capitalize on this heightened demand and secure steady rental income. Additionally, economic uncertainty can make renting a more appealing option for many individuals, further driving demand for rental units.
Tax Advantages
The tax implications of selling a property can be significant. Selling can trigger capital gains taxes, reducing your overall profit. According to the IRS, capital gains tax rates can be as high as 20% for long-term investments, depending on your income bracket.
By continuing to lease, you can defer these taxes and potentially take advantage of tax deductions related to property management and maintenance, such as depreciation, repair costs, and property management fees. These deductions can offset your rental income, reducing your taxable income and increasing your net profit.
Building Long-Term Wealth
Real estate is a proven avenue for building long-term wealth. By holding onto your property, you benefit from potential appreciation in property value over time. Real estate typically appreciates, meaning your property could be worth significantly more in the future. Coupled with the steady cash flow from rental income, this appreciation can enhance your overall financial portfolio and provide a solid foundation for future investment
Diversification of Income
Leasing your property adds a layer of diversification to your income streams. Instead of relying solely on other investments or income sources, rental income provides a steady and reliable cash flow.
This diversification can offer financial stability, especially during economic downturns or market volatility. Rental income can act as a buffer, ensuring you have a consistent revenue stream regardless of market conditions.
In summary, leasing your property with SPM Residential Services allows you to benefit from high resident retention, annual rent increases, and our in-depth knowledge of the market. Before deciding to sell, consider the long-term benefits of maintaining your rental property.
We'd love to help you review your options and provide a free rental analysis for your property. Give us a call at 910-239-1338.