Rent it or flip it?
Last year the answer to this investor question was simple. Rent it. My investor clients would buy cheap foreclosures, fix them up a bit, and rent them for 10+% cash-on-cash return.
This year the small investor environment has changed. Prices have gone up; those cheap “fixers” have mostly disappeared. We can still find properties that return a more modest 5%-7% but now, because home prices are rising and the inventory is low, you should be looking at the advantages of taking short-term profits by buying, fixing, and re-selling as soon as possible.
What should you consider as you make the decision, rent it or flip it?
What does that mean? Use of profit. Suppose you decide to flip the property, and after all costs (buying, holding, remodeling, selling, taxes), you net a modest $35,000 on a little ranch home flip. I give you a check for $35,000. After taxes. Net. Profit. $35,000. So what? What are you going to do with it?
If you enjoyed reading this article, and want to find out more,
just CALL CJ at (530-906-4715) or subscribe below.
Get the latest posts delivered direct to your email