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Of course you’ve thought about selling your Atlanta rental property. This is a seller’s market, and you’ve likely watched other homeowners sell for higher than asking price. It’s quite a temptation.
But, there are a number of arguments to be made in favor of holding that investment property. The rents you’re earning are increasing, which brings in more cash flow. Add to that the rising appreciation and value of your home - holding the asset is often a better idea.
Home prices are driven by the market, the current interest rates, and basic supply and demand. So why wouldn’t you sell now?
Here are a few reasons.
You’re Earning Consistent Rent from Good Atlanta Tenants
Sure, the sales market is hot. But, the Atlanta rental market is just as hot.
You may have noticed that there’s a huge demand for well-maintained rental homes in desirable locations. If you’re able to provide that, you’re going to see higher rents and well-qualified tenants who are willing to pay them.
You have to remember that your rental income is doing more than putting a little money in your pocket every month. It’s also paying down your mortgage, eliminating the debt and increasing your ROI month by month. When you sell, you get a big payment but you also lose the steady and profitable rental income that actually makes you money in multiple ways.
The population in Atlanta won’t be dwindling any time soon. The local economy is strong, which means you’re always going to have a solid pool of tenants who can pay rent on time and help you care for your investment.
Supply and Demand in Atlanta’s Real Estate Market
In general, the supply of inventory in Atlanta’s housing market is a lot less than it was a couple of years ago. There just aren’t a lot of houses to buy, even as demand surges. While this might sound like a good reason to sell, you have to consider what low supply and high demand does to your own property value. Even if all the new construction catches up with the demand, it’s going to take months for supply to increase meaningfully. There’s also the cost of building materials, which is rising.
With bidding wars and huge offers being made on the homes that are available, the value of your property goes up. This means you’re making more money without having to sell.
Tax Benefits with Atlanta Rental Homes
Let’s not forget the tax liability that comes with selling a property.
You’re likely to make a lot of profit if you sell, and that’s going to expose you to some unpleasant taxes.
But, when you keep the property as a rental, you’re actually benefiting from some pretty great tax breaks. You can write off depreciation, maintenance, interest charges, and professional fees like property management, insurance, and accounting.
Unless you absolutely need to sell your Atlanta investment property, we recommend you hold onto it. Continue renting it out to earn the best possible returns in the short and long term. Remember that Atlanta’s housing market shifts over the course of months and years. Prices won’t fall tomorrow.
If you’d like to talk more about the current market state or you have questions about your own portfolio, please contact us at Property Services of Atlanta. We’d love to help.