3 Tips Tips from Someone With Experience

What to Choose Between Property Flipping and Buy-to-Let.

There are two options to select from when opting to invest in real estate. One of the two options is flipping the property which means that you engage in activities to raise its value and later sale it out at a reasonable profit. The other choice is renting out the property once you purchase it to get long term returns in the form of rent payments, a concept called but-to-let.

There are heated debates in the real estate market whether flipping or buy-to-let is the better option. There is never an real answer as to which of the two is better and below are the features and drawbacks of each so that you may do the picking. More often than not, people relate property flipping to real estate investments but it is not the only one. Compares to buying and renting out property, flipping property enjoys faster returns on your investment in terms of profits.

Flipping property can be done within a short period of two years after buying the property and doing the improvements like renovation. Flipping property is not opted for because It usually brings the feeling that your investment was not worth it mainly due to the preconceived notion that investments should only be long-time. The main disadvantage is that it may seem easy in its plan but it is practically very hard.

It may seem quite easy on paper but the obstacles on the practical market are proving it very hard to realize. The first step is to find the best property to buy that is sold at an affordable price and has some room for improvement where you seek to make even more profit. You then have to evaluate the cost of your repairs and improvements to ensure you don’t run at a loss nor spend too much money on the improvements. The final step is looking for the right buyers because most individuals prefer renting property rather than buying.
Buying and renting out property has reigned as the more popular of the two. The main reason most people opt for this option is that it guarantees that the owner makes money over an extended period of time. It is also more applicable because there is no restriction to later increasing the value of the property and sell it at a profit making even more money. It is preferred also by commercial real estate investors because you do not need to engage in any activity like improvement but rather receive money while relaxed.

The disadvantages of this option is that you do not get you money at a go because you will only realize profits at a far much later date. Your tenants will expect you to ensure their living and working conditions are optimum, it may be costly to realize this. The property owner may lose income in the form of rent when the tenants leave the property and for the period taken to find another tenant.

The choice is now left to you to do on the basis of your personal requirements.