Investing in real estate, or thinking about investing in real estate, is a little obsession of mine.
A little over three years ago I flipped a house. It was one of the most exciting financial moves I have ever made and I have been feeling the urge to do it again.
Investing in real estate is my next financial goal. The only problem is making the decision of whether to flip or rent.
Flipping a House
Buying a house with the sole intention of flipping it (buying low, fixing up, and selling for profit) is a little risky. You have to rely on your gut instincts as well as the advice of the Realtor.
You also have to find a bargain priced home in decent condition and in a decent neighborhood. From experience I know this can be done.
My criteria for a flip house is as follows:
- Decent neighborhood
- Low price range ($30,000 – $50,00)
- Minimal repairs needed, preferably only cosmetic
I am lucky in the fact that I live in a very low cost area. There are foreclosures by the dozen just waiting for someone to purchase. I’ve actually had my eye on a property for the past couple of weeks and have been battling myself on whether to go see it or not.
Flipping a home is the most appealing option to me specifically for the large, upfront return on investment.
Renting a Home
If flipping a house didn’t work I’d then have to rent it. Renting a home can be a great investment but it doesn’t come without its own set of challenges.
The potential problems I see with renting a house are as follows:
- Finding renters
- Keeping up with maintenance
- Added expenses (landlord insurance and property tax)
The absolute most important aspect I would look for in a rental home is something that would bring positive cash flow each and every month. The rent I would collect would need to outweigh the mortgage payment, property insurance, and landlord insurance. There are of course ways to cut these costs down like cheap landlords Insurance from CIA.
It’s also a bit stressful to deal with tenants. I used to collect rent payment for my grandma’s several tenants and I can’t count how many times the rent payments were made late or not at all.
However, if the house appreciated and I got tired of renting I could always sell the home for a profit after a few years of renting it out.
Conclusion
Eventually I would like to make both flipping and renting homes part of my business plan. I would like to start with flipping houses first so that I could save up enough money to purchase rental homes without taking on a mortgage.
Hello, There are foreclosures by the dozen just waiting for someone to purchase. I’ve actually had my eye on a property for the past couple of weeks and have been battling myself on whether to go see it or not.Text marketing
Hello, Your house is perfect and beautiful and dashing. I really want to buy such a beautiful house. Thank for the great information that you mention in the article.avoid foreclosure
Financial advisors are a great option, though one should probably accumulate a bit of assets before finding one to make it worth while. At the beginning, focusing on living below your means is still much more effective then trying to increase your investment gains.