What to Choose Between Property Flipping and Buy-to-Let.
There are two options to select from when opting to invest in real estate. Flipping is one option which entails buying the property and uplifting its value by different corrective measures and selling it at a reasonable profit. Renting out a property once bought stands out as the second option where the tenants pay monthly rent.
There is a huge tussle of opinions on which of the two options is the best money making idea in the real estate market. There is never an real answer as to which of the two is better and below are the features and drawbacks of each so that you may do the picking. There is a false assumption that real estate only involves flipping property. The main characteristic of flipping property is that you get the returns of your investment really fast.
As stated in the description, you can opt to buy a property that has room for improvements which you will do and sell the property at a higher price all in less than a year. Flipping property is not opted for because It usually brings the feeling that your investment was not worth it mainly due to the preconceived notion that investments should only be long-time. Contrary to its easy outlook, flipping property is very hard to apply.
Flipping is deceivingly easier on paper because the plan may not consider market obstacles which may make this a very hard task to accomplish. To begin with, you have to look for a property that on top of being priced reasonably, has room for improvement which you seek to correct to realize that profit. The next step is doing calculations just to be sure you do not spend too much money on the improvements and at the same time making certain you gain some profit from it. Because most people prefer to rent property due to the high finances required to buy property, it may be very hard to find a buyer for your property.
Buying and renting out property has reigned as the more popular of the two. The reason for this is that renting property guarantees a long term in stream of money in the form of rent over a long period of time. The owner of the property may choose to rent the property for a period of time before flipping it later on. It is also quite common among commercial investors realty because you only have to sit back and rent streams in.
The profit is usually realized after years of renting out the property which acts as a disadvantage. Providing good living and working conditions for your tenants is paramount and may prove to be expensive. Another major drawback is the loss of income for the period when tenants leave and finding new ones.
Both ways are awesome ways of making money and your choice should be aligned with your own personal requirements.