Flipping a house or property is the process of purchasing a property at a discount, upgrading it and then selling it at a profit. Flipping requires an investment of an enormous amount of money, considerable effort in purchasing and improving the house and eventually selling it. However since the flipper intends to sell the property fast, the carrying costs are considerably reduced. In fact, the faster one flips a property, the better profits he enjoys.
If you are thinking of investing in real estate, you may be weighing all your options wondering if retailing, wholesaling or flipping will be your best options. In case you are considering flipping property, the following are the four advantages of flipping over holding.
Flipping Versus Holding – Advantage #1
One of the benefits of flipping is the quick income gains. You can invest in a flip, make improvements in a few days and then sell the property in a few weeks or months. Compared to holding, investing in a property through flipping will lead to much faster profits. It is also an advantage because you don’t have to incur any maintenance and upkeep costs that come with holding a property for an extended period.
Flipping Versus Holding – Advantage #2
The other advantage of flipping over buy and hold is that it has fewer hassles since you are not dealing with tenants. Most of the investors who buy and hold property typically rent them out to tenants. However, residents come with their problems like forgetting to pay rent, damaging property, not paying rent on time and running away with rent arrears. Flipping, on the other hand, has fewer issues due to the lower carrying costs and since they usually deal with distressed properties, the initial investment is always less than the market value.
Flipping Versus Holding – Advantage #3
One of the best reasons to choose flipping over holding property is the ability to influence the selling price of the property. With a rental property that you buy and hold, you can’t charge more than a tenant is willing to pay you, and in some cases, there’s a limit to how much the tenant can pay. So, this means that you will always be limited by the income you get from the tenants. But with flipping, once you make improvements on the property, you add to its value. In fact, the more upgrades you make, the more you increase the value.
Flipping Versus Holding – Advantage #4
Another favorite reason to make you choose flipping over holding is the ability to get a huge amount of income. Holding and renting property will only give you a few hundreds of dollars every month, but flipping will provide you with thousands of dollars in profits at once. That’s a huge income in a single month.
In case you are still debating within yourself if you will buy and hold or flip, there are various benefits and drawbacks to each. However, these four advantages of flipping over buy and hold will provide you with a convincing reason to critically consider flipping as an option for you.