Which is preferable: property flipping or real estate property investing?
To reach an answer, it may help to identify each term and put each one in perspective.
Home flipping is the strategy of acquiring a property then selling it at a profit in the smallest period manageable. An investor is aiming to make a good sum of profit within a very short period of time, thus the word flipping.He/she does not hold onto it for the purposes of income. As a matter of fact, the less time they own the home, the better their profits.
Real estate investors want to keep the property for income then selling later after he has gotten rental income.
Investors in real estate buy real estate and intend on selling at some point, but usually hold the property for years or forever.
Is real estate investing or house flipping right for you?
The big difference is house flipping pros get their money back fast with a quick sale while investors want to make money in the long term
House flipping pros buy homes way below market. In doing it this way, the house flipper locks in fast profits.
Usually, the real estate will be sold at a price much less as compared to its selling price (in the range from 40-80% below market price).
Buying and renovating a home is the easiest way to house flip. The house flip pro purchase the house, quickly renovates it and then sells it under a month or so.
House flip renovations are popular because if you estimate your fix up costs, you can turn a profit quickly. It can be easy to find experts who know the particular renovations required and the refurbished house will have a really nice look for resale.
This allows the home flipper to get a fast market for the house and at the same time fetching a very good price for the house.
House flipping tends to be simpler than buy and hold real estate investing because the flipper does not deal with landlord issues and the profit is made more quickly instead of it being done over time.
Depending on the market or community where a house flipper works in, the house flip professional can make a higher return of their invested dollars in shorter period of time if he flips the house quickly. This is in contrast to real estate investing where the investor has to wait for long periods before the property can be completed and sold to make a profit..
With buy and hold real estate, the investor makes money through income, provided his expenses are less than his income from rent. A big advantage to buy and hold real estate is that the real estate investor does not need to sell immediately and can wait for market conditions to improve, then worry about resale when the time comes.
Additionally, the buy and hold real estate investor can also leverage bulk buying of renovation materials if he is going to do multiple properties at once
For hassle free and quick return on investment, I am biased in favor of house flipping…but you be the judge!
For more information on flipping houses, click this link to get more house flipping tipsas well.