Real estate is a field which undergoes constant change in terms of demands, technologies and finance. There are many people who look for investing their hard earned money in real estate. But not all of them have a clear idea on how to do it properly and how to choose the best method. Here are some points to identify whether flipping or rental properties are best option for you.
Reasons to start real estate
Real estate strategies such as flipping properties and owning rental properties are extremely different. Individual investors cannot choose both and should decide on which option is best for them. In common view point, flipping is best option when a person want to form a full time career on real estate. It is a constant work and one need to keep on looking for projects where they can buy heavily discounted properties which needs repair and make huge profits in every single deal. But it needs time for each project from typically about 6 months to 1 year. When a person wants to make passive income from real estate and is not interested to be involved in constant processes which are required for flipping, they can do with a buy and hold rental property. It is a great opportunity to invest once and then happily sit back and collect rents and have time for personal commitments. These rental properties generate a steady cash flow and offer high tax benefits while building the net worth of owner.
Pros and cons
In rental properties, steady long term income is the most important advantage. Maintenance of property can be outsourced at low cost to avoid hassles. Over time, property gains value and can be resold. On a negative side, rental properties does not get you the entire profit at once and if the mortgages made for investment lasts for a longer period, it takes more time for the owner to reap profits. Flipping is instantly gratifying and has lower risks than many other market investment strategies. But it has disadvantages in terms of high investment, heavy transaction charges both during buying and selling as well as change in market demands. With this knowledge, nicki zvik real estate can help new investors with a better plan to suit personal needs.