8 Reasons Why You Don't Need To Sell Your House Now

8 Reasons Why You Don't Need To Sell Your House Now

Here are the 8 Reasons why keeping your house instead of selling it is still a wise real estate decision

Owning and renting out your property is increasingly a choice investment for more real estate investors in Nigeria. Despite the perceived risk of the housing market, the outlook is favorable to become, or continue being a landlord. Though selling is still a valid option, the benefits of renting oftentimes outweigh the advantages of selling your property.
Here are the reasons why:

1. Long-Term Equity
What your house will be worth when you sell depends on the state of your mortgage and the housing market. However, trends show that the housing market continues to grow as the average sale price of existing Terrace houses and Block of flats in Lagos rose 72% over the last 3 years. And property owners turned landlords continue to see larger returns and extra cash as rental prices surge.

2. Long-Term Profit
If you can consistently rent your house out for more than your mortgage payment plus other expenses, you will grow a profit over time. However, that’s not always the case, so landlords turn to annualized tax benefits, real estate appreciation, and refinancing opportunities to make up for any monthly or short term shortfalls. And if you eventually sell your property when the market is good, you can create great returns on your investment.

3. Tax Shelter
There are numerous tax benefits to owning a rental property. You can write off all of your expenses, like Renters fees, utilities, repairs, mortgage interest, and property taxes, to name a few.

4. Avoid Loss in a Down Market
In the event the market in your area takes a turn for the worst and selling your home is not in your favor, you can hold on to the property and rent it out until you can make a good profit from selling.

5. Protection Against Inflation
Owning a rental property is a safe investment and an even better asset that can make money during periods of high inflation. It gains value when inflation is high and creates cash flow from renting during any economic period. It’s a win-win.

6. Forced Retirement Plan
Sometimes we lack the discipline to save or put monthly deposits into retirement accounts. Owning a rental property is a commitment that you are required to manage and maintain for the long-run, hopefully well into retirement. Unlike an IRA, SEP, or 401k, a rental property can help you build larger returns in equity and cash flow.

7. Tax-Free Cash Flow
If you leverage your capital, because of depreciation and mortgage interest deductions, your cash flow should be tax-free. A certified tax professional can help you limit taxes on your cash flow and defer taxes on capital gains if you sell your property in the future.

8. Vacation Property
You can use your income property as a vacation destination and rent it out when you are not there. Free vacation home!

Rental Demand for Terraces, Duplexes, and Flats is Increasing
There is a resurgence in renting. With growing demand and dwindling supply, landlords can increase rental rates (on par with regional increases). Here are some stats and reasons why:
As of early 2013, over 15 million Nigeria was renting and the number of renter households is likely to increase by between 4.0 million and 4.7 million in 2014.

Over 30,000 Duplexes, Terraces, and Flats are expected to be rented across Lagos State and over 3million within Nigeria by 2021 – a 185% increase from the approximate 1.2 million rented in 2019.
Rent is reportedly increasing in today’s rental market, yet 40% of people say they rent and continue to rent because they enjoy it. There has been a dramatic increase in buy-to-rent purchases recently with landlords who own more than one property.

Home prices will rise half as much in 2020 because more supply will come on to the market. Credit will remain tight as un/underemployment, is expected to rise, therefore increasing the need for rental units and replenishing the demand. 

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