Fix and Flip vs. Buy to Rent
The fix and flip market can be lucrative, but, the fix and flip market is really a kind of speculation. With fix and flips you are engaging in a bit of a risky financial decision. The market can fluctuate, there are many underlying financial responsibilities - like doing major remodeling work on the homes you purchase. Much time and effort is involved in the fix and flip market and it requires cash on hand. So when you decide to buy real estate with the intent on fixing it then flipping it, you have really signed up for an additional job. Much profit can be made with fix and flip real estate, but it’s a business that requires your time, effort and commitment. It’s not something that should be considered lightly.
So, what’s the difference between fix and flip and buy to rent? When you own real estate you are committed to a longer term investment. It’s an investment based on longer-term capital gains and dividends (rental income). Fix and flip is a shorter term game. You are looking to buy low, fix anything cosmetically or more, then sell for a much profit as the real estate market allows.
Flipping can lead to a lot of money in your pocket, in a smaller window of time. It eliminates the longer-term headaches of owning property and managing it, so you won’t have to keep putting money into the same property. If you don’t have a lot of time to manage property, then flipping may be the answer you’re looking for.