Should You Rent or Flip Your Fixer-Upper?
Some real estate investors thrive on buying up properties, fixing them up, and flipping them. Others are staunch believers in purchasing houses to use as long-term rentals. Is one approach better than the other? Not necessarily. Both renting out and flipping houses come with pros and cons. The ideal method is whichever one fits into your overall investment strategy and goals. If you’ve worked hard at remodeling a property and are trying to determine what to do with it, this information and advice might help! Reach is at: http://www.rehava.com for more information.
Marketing Your Property
Marketing is something you will need to consider whether you decide to rent out or sell your fixer-upper. If you plan to rent out your property, you need to create a website that beautifully captures the property and promote your listing on social media. You may need to resize some of your listing photos for effective social media posts, and using a free image re-sizer tool can make it an easy task. You can then easily upload your resized images to your social media accounts.
You also need a website if you are selling your property. Consider hiring professionals to shoot your listing photos, and turn to rehava to quickly connect with potential Colorado buyers!
Benefits and Drawbacks
Buying and holding a property provides the opportunity for a steady monthly income stream, and it can help you amass wealth through increasing land values. The longer you hold an investment property, the greater the property value is likely to increase. And if you can buy in a buyer’s market and sell in a seller’s market, you’re talking about a sizable ROI!
You also yield some tax benefits by renting out your property because rental property comes with significant tax deductions. You can write off specific expenses, such as repairs, maintenance, and property management.
Keep in mind there are cons to owning a rental property as well. You will have to prepare for potential vacancy costs through certain months or years. And if you need to hire a property manager, you will need to budget for that too.
Flipping the fixer-upper you just remodeled will probably give you a quicker return on your investment, assuming you are able to sell it for profit. It often takes around six months to flip a house, but you will need to prepare for it to take a bit longer if it is your first time.
Moreover, many investors see selling a fixer-upper as the safer option. Real estate markets are usually more predictable than the stock market and you’re often able to keep capital at risk. You also don’t have to deal with the risks and hassle of management and leasing.
With that said, you could experience cost issues by flipping your property. Selling a newly remodeled house can require a significant upfront investment, which can make it difficult to keep a healthy cash flow. Also, you may see an uptick in your tax bill if the property sale increases your income significantly.
Different Ways to Flip
Lastly, consider that there are two different flipping strategies real estate investors utilize. You can purchase a house that is below current market value due to financial distress. Or, you can purchase a property with severe design or structural problems. If you are willing to put in the work, buying a fixer-upper to remodel and flip could be the best approach.
At the end of the day, your specific financial situation and goals will determine whether renting out or flipping your investment property is the best strategy.
If you are looking for a quick return, purchasing a property and then selling it is probably the way to go. But if you are playing the long game, consider buying and holding the property. Either way, you will benefit from working with a mentor or advisor who has experience in real estate investing.
Are you looking to buy a home in colorful Colorado? Visit rehava.com today!
Article written by: Andrea Needham – email@example.com
I am an active Realtor specializing in the Douglas County /El Paso County areas. I have experience listing and selling residential properties throughout Douglas County including: Castle Rock, Parker, Highlands Ranch, Franktown, Sedalia, and Larkspur. I am currently expanding my business to; Black Forest, Monument, Colorado Springs, Peyton, Falcon, Woodland Park, Divide and Cripple Creek.