Flipping Investment Properties May Be Profitable For Some

By Author: Alexandria Anderson
Total Articles: 46
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Real estate investing can be seen as a complicated issue, but that is only because there are so many choices. As an investor, you have a virtually unlimited unlimited number of ways to profit. But that means that you must be able to to make choices. You have to decide how much you'll educate yourself regarding each element of real estate, who you want on your team, where to seek properties, whether a property is the right one for you—and on and on.

One question you'll inevitably face is how you'll use a piece of property after you've purchased it. You might not be the type of investor who wants to purchase a piece of property and hold on to it for an extended period of time. Maybe you don't want to have to grapple with renters and property managers or to see to the upkeep of a piece of real estate. If you don't see these sorts of activities as appealing in the slightest, the other option at your disposal is flipping.

Flipping a piece of property is selling it as soon as you purchase, perhaps even at the same closing. At the very latest, flippers tend to start preparing to sell a property the same day ...
... that he or she purchases it. Some flipperswill even begin the process prior to purchasing the property, although this is very risky business. However one goes about doing it, flipping inevitably involves hurrying to the auction block, as an empty piece of property is always a liability.

However, if you hold a piece of property, you have the chance to raise that property's value. If you manage to find a great deal, the money you've spent on it will probably be a tiny fraction of what you can potentially make off it, and when you finally decide to go ahead and sell it, you'll be able to do so at your convenience and get a higher price than you would've by flipping.

This is true especially if your piece of property is a multifamily dwelling such as a high-rise apartment. If it is the right property in the right location, and you take care of it, occupancy is probably going to stay high. With a piece of property like that, your profit tends to increase exponentially. With good management, that is almost guaranteed.

On the topic of management, you'll need to decide between performing that function yourself and hiring a company to do it on your behalf. If you are the owner of an especially sizable piece of property, or if you own many properties, you'll probably have to hire a manager. Ken McElroy, author of The ABCs of Real Estate Investing, advises that you hire a real estate management company so that your talents and your time can be put to better use elsewhere.

These are the kinds of things you'll have to consider if you hold a property.

In the end, however, whether you decide to flip a piece of property or hold on to it depends chiefly on what you'd rather spend your time doing. Perhaps you thrive on the fast paced workday that flipping entails. Maybe this rush feels like an adventure to you. If this is the case, you ought to learn the right way to flip properties (which is to wait till you own a piece of property to arrange a sale and not to approach buyers at the very closing at which you obtained a piece of property).

However, if the idea of nurturing a piece of real estate appeals to you, then purchasing and holding a property might be the way to go. Depending on your talents, you personally may make more money working one way as opposed to another. It is completely your decision.