There has been ongoing debate regarding the best way to recoup the investment made in constructing a residential apartment building. For those involved in real estate, where does the real profit lie? Is it possible to recoup the money spent on constructing a residential apartment building through renting it out, or is selling it a better option for recovering the investment?
Real estate is an asset and it generates profit overtime making it worth to invest in. You can choose go sell it and still get a good amount of profit because the cost of building materials increases overtime. There are some people who don't believe in rents because it will take a lot of time for them to get the money that they use in building it.
However, i will prefer to rent it out because it is an investment that can generate profit from genertion to generation as long as you don't sell it. It can be passed on to your children.
Just like most members here have already said, it depends on the kind of real estate investor one is. Currently, the world's economy is not smiling and the prices of building materials keep increasing as the day goes by. The cost at which one builds an apartment will definitely not be the cost at which he will build that very design of apartment tomorrow because the price of materials and even labour will go up. If the investor calculates all the cost involved in building a house today and sells that particular house, chances are that he will spend even more building that same house again tomorrow. I am using the current economic situation in my country as a case study.
Except the investor just wants to sell off the house outrightly without any intention of rebuilding, I think renting out the building will generate more returns and is even more profitable than an outright sale.