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Deciding whether to flip or rent out your investment property can be a difficult choice. Both have a variety of pros and cons, so today I’ll be talking about each option in order to help you make a well-informed decision that meets your goals.
First, there are a few different ways to buy your investment property. You can find someone who’s simply looking to offload their home quickly, and you can often buy these at market price or even lower. Others have been unable to maintain their property and will give steep discounts by selling it as is.
"Renting and flipping are both good options, but figuring out which one to choose depends on your real estate goals."
Next, you need to decide whether to flip or hold. Flipping is a good choice if you’re looking to get cash quickly. It can take anywhere from a month to half a year in order to fix up the property and list it, and you can make some fairly quick money. Right now, the average nationwide profit is around $50,000 on flipped properties. However, there are some risks involved—the market might change and then your invested money is stuck in the home. You’re also spending time and effort to renovate the home, and your income may be subject to capital gains taxes; speak to your tax advisor to find out how this may influence your decision.
On the other hand, you can hold on to your investment property and rent it out. You did all the hard work of renovating it, so why not keep it and make some passive income? Instead of getting paid in a lump sum, renting allows you to receive cash over the long term. On top of this, the property’s value will likely increase throughout the coming years. It’s a fantastic way to build wealth. Taxes are different here as well, as you can get a write-off for investment property ownership. Renting means you’ll have tenants, however, so you’ll be on the line for things like maintenance, late payments, and other tricky situations.
Renting and flipping are both good options, but figuring out which one to choose depends on your real estate goals. If you’d like to get a better idea of which one to go with, have any questions, or would like more information, feel free to reach out to me. I look forward to hearing from you soon.
