Real estate investment properties begin with knowing what your intentions are for it. Its almost like trying to decide what came first the chicken or the egg? …well, it depends on what you need the chicken for…
What is the best strategy for great real estate returns FLIP or HOLD. The answer lies in your choice of real estate investment properties you’ve selected. More piratically applied, the answer lies in the eyes of the “FLIPPER or HOLDER”. Both strategies have terrific rewards and pitfalls. What typically drives the answer though is what you need the real estate for; ultimately, what the goal is?
Real property management has typically been a huge profit driver. However, the real estate market can be volatile because it has many moving parts. FLIPPING or HOLDING it takes hands on experience to avoid its pitfalls and be prepared. A seasoned real estate investor should be able to see and plan for unforeseen pitfalls due to his experience where a beginner can be more vulnerable.
Typically the real estate market needs to be analyzed every few months to stay in touch with current market values. As most investors know, FLIPPING requires more cash than holding because a FLIP needs to be presented in its best light for sale. A HOLD can have far less expense upfront because it simply needs to be clean operable and rent ready.
FLIPPING is a great way to generate instant returns when done properly. Aggressive FLIPPING creates terrific annualized ROI. However FLIPPING is subject to current trends in economic policy, regulation, unemployment and local economic conditions. HOLDING property has its volatility as well; differed maintenance and vacancy factors must always be considered and analyzed. But long term equity gains are usually great rewards.
Done properly a HOLD is simply a savings account with the tenant paying the mortgage. Either way is great. FLIPS bring instant returns and HOLDS do it over time. In the end these factors all build to the investor’s intention. Most important is to enjoy it. Owning real estate is a great way to make a living. It affords the freedom to work without punching someone’s clock. However the dedication it takes to own it should not be overlooked. It is a hands on business the same as any other. You will be married to it if you do it full time. As most real estate investors will agree…FLIP or HOLD…. its all good when you just love being married to real estate.
This post is written by (me) Don Gilmartin in order to inspire the DIY, design & flipping community. As CEO and founder of Fliptechs I have over 20 years of design, construction, and real estate, experience to share.