what is the advantages and disadvantages of holding a property?

Answer 1

Advantages: price of property may go up.
Tax write-off for interest payments on mortgage.
After property is paid off, you can collect income from rent.

Disadvantages: Maintenance costs
Insurance and property taxes
Price of property may go down.

Answer 2

The main disadvantage of holding a property is that you have to work with people who may not have the same vision as you do.

A vision of having multiple people happily paying down your mortgages, generating for you and your family positive monthly cash flows and equity positions, all the while keeping the property in good shape while they lease.

Another disadvantage could be that you have to deal with the IRS.

There could be a time that you will have to explain to them that the reason you have paid so little in taxes is that you have been able to write off the property management cost, capital improvement, interest and depreciation of your real estate portfolio.

However, I heard from the real estate investors that I work with is that another disadvantage of holding great positioned property is the stress fractures in their legs. These guys have to actually walk to their mail boxes to pick up their checks. Some of my more savy investors, have avoided stress fractures and have their checks automatically deposited into their banking accounts, yet I'm worried for them... they might get carpel tunnel.

I'm sorry I couldn't think of any advantages.

Happy Investing,

Kendall E. Matthews, CRMC

Answer 3

Advantage: Your credit rating goes up, you can pledge it as a surety when needing a loan, may appreciate over time.

Disadvantages: May cost you money to maintain, may attract taxes, may go down in value etc.