Rent or Sell? Why Cash Flow Isn’t the Only Factor in Real Estate Decisions

[Pedro Andrade]

In the last two weeks, I’ve spoken with five property owners who were weighing the decision to rent or sell their properties. Each of them was looking for a professional perspective, but I noticed a common theme—almost all were focused only on cash flow.

While every situation is unique and depends on individual financial goals, I always emphasize the four ROIs of real estate:

1. Cash Flow – The immediate rental income after expenses.

2. Appreciation – The long-term increase in property value.

3. Loan Paydown – The tenant is effectively covering the mortgage, increasing equity over time.

4. Tax Benefits – Depreciation and other deductions that can significantly reduce taxable income.

Of the five owners I spoke with, only one chose to sell—and that was due to an immediate need for liquidity. The others saw the long-term benefits of holding their property, particularly the tax advantages of depreciation and the potential for appreciation over time.

Many property owners assume cash flow is the only metric that matters, but real estate offers multiple ways to build wealth. If you're considering whether to rent or sell, it’s worth looking at the full picture before making a decision.

How do you evaluate the long-term potential of your real estate investments?