Page 88 - AAGLA-MAY 2022

88
MAY 2022 • WWW.AAGLA.ORG
Why Now Might Be a Good Time to Sell
Your Income Property
By Dwight Kay, Founder and Chief Executive Officer, Kay Properties & Investments
While today’s rental property owners are facing challenges and pressures they have never seen before,
Hthere are alternative investment strategies that should be considered.
istorically speaking, independent real estate investors, who held onto their investments for the long-term, walked a relatively straightforward (although bumpy and slow at times) path toward achieving asset appreciation and long-term wealth.
This path would often look something like this: an investor would purchase a piece of property that would potentially generate enough cash flow to cover the expenses, including principal and interest on the mortgage, insurance, property taxes, and maintenance costs. Over time, the property would (hopefully) increase in value, income (rents) would rise, and certain tax advantages like the ability to deduct
operating and depreciation expenses could be utilized to improve cash flow.
However, the steady march of new government regulations, the impact of COVID-19, and some basic real estate economics have helped some real estate investors recognize that the real estate investments they own have become less profitable and could even worsen to the point where investors could actually be losing money each year.
The Growing Impact of Rent Control Before and After COVID-19
While this may sound like hyperbole to some, our firm is actively working with numerous apartment owners across the country, and we hear first-hand some of the challenges and pressures property owners are facing today. Even national media are picking up on this trend. For example, a recent Wall Street Journal article cites that apartment owners and investors are leaving California