Is Flipping Homes a Better Deal?

In the realty sector, it is often asked whether buying and selling is better than buying and holding or not. However this question does not have a simple answer as various investors believes that the first option is better than the second one while other believes that opposite is true. This article would help you to make a comparison between the opportunities that are presented by both the investment options.

First of all let’s look at the reason why is it beneficial to invest in real estate. Residential property ownership has attracted the attention of retail investors for a number of reasons and some of them are:

• Investment in realty sector provide predictable return
• The equity which has been created by the real estate investment provides various investment opportunities
• Property investment provides positive cash flow to the owner
• It helps the investor to earn capital gain

One of the biggest advantages of flipping a property is that it helps the investor to gain immediate return on his investment. Unlike the stock market, the realty sector is more predictable and produces profits in a short period of time. Flipping properties is regarded as a less risky investment because it can help the investor to keep the capital risk at minimal.

For a large number of real estate investors, flipping properties must be done tactfully rather than making it a long term investment. As transaction costs are high, it can have significant affect on the profits of both seller as well as the buyer. The two types of properties that can be flipped are:

• Apartments or home bought below the current market rate
• Fixers or properties that have design issues

Investors in various cases, focus on the distress properties as they can easily secure homebuyers for such properties. These properties are not in the need of remodeling or any amendments. While on the other hand, people who choose fixers have to remodel the property to make it worth selling. They are required to make the apartment more efficient and attractive so that it can secure buyers.

On the other hand, holding the real estate can help the investor to earn amazing wealth. Long term property ownership can, in some cases, decrease the value of the land and cause losses to the owner. Equity investors who can readily analyze the realty sector have the ability to manage different deals. They are responsible of creating and executing different business strategies on the property. However first time home buyers and investors are often ill prepared and thus cannot manage their property well.

So it can be said that the decision of flipping a property or holding it, is purely based on a person’s personal choice. A person who can find good and reliable tenants can hold his property for a long time to earn positive cash flow while those who are unable to secure a tenant can flip their property at the earliest to gain profits. So if you are thinking about making a choice between the two, remember to make an informed decision.

In the region of Chandigarh Punjab harjirealtors has turned out to be one of the trusted real estate agents. We are known to provide profitable property investment options along with complete real estate solutions, thus helping with successful investment. Check out our website harjirealtors.com/sunny_heights.php to know more about us.

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