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Cape Cod Rental Property Investing vs. the Stock Market

Cape Cod Rental Property Investing Versus the Stock Market

Many people object to Cape Cod rental property investing because they believe that it will take up too much of their time and will therefore produce lower net returns than investing in stocks would. Still, many savvy investors are investing in rental properties – why is that?

There are four benefits to Cape Cod rental property investing, while stocks only give some of those benefits:

A Source of Steady Monthly Income

Income is a big advantage that real estate investments have over stock investments. The income is defined as the profit which is left over after any other debts and expenses paid, so in this case, that would be any remodels, updates, or general fixes before the house is able to be rented. Rental properties offer monthly income or “cash flow” that most stocks do not offer.

Tenants Buying Property for You

Our Middleborough property management service states that the rental property investing there uses leverage, or a loan against the initial purchase of the property, to put a portion of the monthly mortgage payment toward two things: to pay the interest and to go towards equity. For anyone who owns a home, this should seem like familiar territory. However, there is a twist, that is the mortgage payment isn’t coming out of your pocket, but rather the tenant is buying the building for you. If you think about it in those terms, it seems great because when was the last time someone offered to buy stock for you?

Added Tax Benefits on Your Property

The greatest benefit is that you get tax benefits as well. Owning a rental is one of the most powerful tax benefits that you can get. Even if you are making money, depreciation on the property allows you to claim a loss. Over time, this will fade slowly, but then you can do something else to help with your taxes. You can use a 1031 exchange when you want to sell the property. After that, you can buy a different one without paying any tax on capital gains. Then you can start the process all over again. Now of course we do not recommend you do this on your own, but rather with the right guidance and accountant.

Real Estate Goes Up as the Market Does

It’s a common term, but appreciation is when you can sell an asset and make back more money than you paid for it. It is the reason people buy into the stock market. However, many people don’t think that will happen with real estate, which isn’t true. Real Property Management Associates knows that real estate will appreciate as its market continues to inflate. Now, of course you have to watch the economy, but savvy investors stand to make a dollar from this type of buying and selling.

But Isn’t Real Estate A Lot More Work Than Stocks?

If you are paying for the property and taking care of it, then yes, it is more work. You will have to take care of its maintenance and answer every call your tenant has. But it doesn’t have to be that way. You can hire a professional Cape Cod property management service to do aspects for you. Think of a property manager as your stock broker. Even once you pay manager fees, with a good management company, you will be seeing income. This is because they will make your tenants happier so they stay longer, cut down on vacancy time, resolve problems quickly, and even work to get you the best maintenance costs.


Would you like to learn more about our Cape Cod, Middleboro and Taunton property management service? Please contact us for more information.


Call Real Property Management Associates at 508-509-4485

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