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?

• Short-term profits vs. long-term profits
• Risk of a market downturn if we hold and rent
• Tax consequences of each strategy (a topic unto itself)
• Holding costs during remodel
• Landlord skills vs. remodel skills
• Fun.  Yes, fun.  Which is more fun?
• Use of profit.

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?

• Pay bills?
• Buy another “flipper” and do it again?
• Put it in the bank? (No!)
• Go to Bali for 6 months (My vote!)