Turning Low-Interest Mortgages into Profitable Investments
With interest rates once hovering below 3%, you might be wondering: Why sell your property now? If you were lucky enough to secure such a low rate, your home could be a financial goldmine—especially when leveraged as an investment property.
Turn It into an Investment Property
Rather than selling, consider holding onto your property and renting it out. With property values appreciating, this can be an excellent way to build wealth. The rental market remains strong, and with a low fixed mortgage rate, your monthly mortgage payments stay manageable while rental income grows over time.
Appreciation and Equity Growth
Property is appreciating at a steady pace in many markets. If you keep your property, the equity you build increases as home values rise. Selling now could mean missing out on significant appreciation in the coming years. Instead, by holding onto it, you can grow your net worth as your property value climbs.
Maximizing Tax Benefits
From a tax point of view, owning an investment property offers advantages. You can depreciate the asset to offset rental income, reducing your taxable earnings. Additionally, property-related expenses, such as maintenance, mortgage interest, and insurance, can also be deducted to improve cash flow.
Generating Monthly Cash Flow
With a mortgage locked in at a low interest rate, rental income can exceed your monthly costs, providing a positive cash flow. This means extra income every month while your tenants pay down your mortgage, building equity for you.
When Is a Good Time to Sell?
The right time to sell depends on your financial goals. If your property no longer aligns with your investment strategy or you need liquidity, selling could be the right choice. However, if you can manage it as a rental, the long-term benefits of appreciation, tax advantages, and monthly cash flow could make holding onto it the smarter move.
Rental Property is a 3 year Plan
In the current economy, rental property is still a good investment to keep. By pricing the property correctly, you will get tenants. Even if the rental amount is still a little short of your mortgage, the short term loss will make up in 3 years of rental.
We have a tested method to making sure you make your money back in 3 years by keeping your property, pricing it correctly and keeping it occupied. Please reach out to one of our BDMs for a call to discuss this more.
Final Thoughts
If you locked in a mortgage at under 3%, selling might not be the best option. Instead, think about transforming your property into an investment asset. With rising property values, tax advantages, and rental income potential, holding onto your real estate could be a more lucrative decision in the long run. Before making a move, consult a financial or real estate professional to ensure the best strategy for your situation.
