Real Estate Investors - Should You Buy And Hold?
by: Ravok
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One decision you'll find yourself faced with is what you'll do with a piece of property once you have bought it. You might not be the type of real estate investor who wants to buy a piece of property and keep it in your possession it for an extended period of time. Maybe you don't want to deal with property managers and renters or to see to the maintenance of a piece of real estate. If you don't see these kinds of activities as appealing in the slightest, the other option at your disposal is flipping.
Flipping a piece of property is simply selling it as soon as you purchase, perhaps even at the same closing. At the very latest, flippers generally start setting up a sale on a property the day that he or she buys. Some even start the process before they own the property, though this is very risky business. However one goes about doing this, flipping always involves hurrying to the auction block, because an empty piece of property always represents a liability.
However, if you hold a piece of property, you have the opportunity to raise that property's value. If you get a really good deal, the amount you have spent on the property will likely represent only a tiny fraction of what you stand to make off it. And when you finally decide to sell it, you'll be able to do so at your leisure and get a higher price than you would've by flipping.
This is true especially if your piece of property is a multi-family dwelling like an apartment high rise. If it is the right property in the right location, and you take care of it, chances are that occupancy is going to stay high. With a piece of property like that, your profit tends to increase exponentially. With good management, this is almost certain.
Speaking of management, you'll need to choose whether you'll perform that function yourself or hire a management company to do it for you. If you are the owner of an especially large piece of property, or if you have many pieces of property, you'll have to employ a manager. Ken McElroy, author of “The ABCs of Real Estate Investing,” suggests that you employ a property management company so that your time and effort will be used more efficiently elsewhere.
Those are the sorts of things you'll need to keep in mind as a property owner.
In the end, however, whether you decide to flip a piece of property or hold on to it depends on what you'd rather spend your time doing. Maybe you would enjoy the fast paced work that flipping entails. Perhaps this rush feels like an adventure to you. If this is the case, you ought to educate yourself on the proper way to flip properties (i.e., wait till you own a piece of property to arrange a sale and not to approach buyers at the very closing where you purchased a piece of property).
However, if the idea of nurturing a piece of real estate appeals to you, then buying and holding may be right for you. Depending on your particular talents, you personally may be able to make more money working one way as opposed to another. It's totally up to you.
About the Author
Alex Anderson Uses The MLS Minneapolis MN Real Estate Search To Find Money Making Minnesota Investment Real Estate For Her Clients. Download A Free Copy Of "The Investors' Rental Guide" At http://www.GreatInvestmentProperty.com
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