To flip or not to flip? That is the question in the present economy.
Real Estate is the playing ground for investors for profits – more than any field. And it is not a secret that U.S. real estate is reeling under the pressure of depression. We are not talking here about a home owner ardently searching for a home for their family to reside, although they too stand to gain dollars not in hundreds but thousands, if they are shrewd in their calculations. The analysis is for investors, who want to make money on real estate deals – either quick bucks or long term profits.
What the experts say about this? Well – like no two doctors agree, the opinions differ and both sides put forth interesting points for consideration. Here are some of them:
Making money on real estate business hinges on the golden rule “Buy low and sell high” and if this is right, there is no better time than now to plunge head-on. Because in almost all the housing markets, particularly the most sought-after locations of California, Florida, Nevada, and Arizona, you get properties on distress at a fraction of their values. Remember – these properties were unaffordable price-wise during the boom years.
Buying a distressed property – preferably from a home owner facing foreclosure and in the initial stages of foreclosure to get rid of the property – will be a lucrative proposition. A short sale is also a good option to strike with bounty of cash on the negotiating table.
After carrying out smart rehabs and repairs, not exceeding 20 percent of the home value, you can make the home a top-notch one to get listed for re-sale through listings.
But those who advice – buy now but don’t flip – ask the vital question, where are the buyers to purchase your property, even if it is handsomely priced? When home values are plummeting by more than 50 percent in almost all the housing markets, there is no guarantee for reaping a good harvest as return on your investment.
Instead they advise – buy now but keep the property for long term of at least 5 years. If the property is given a face-lift, it is a sure-shot that you can derive steady rental income month after month. When the turn-around happens in the present market conditions, you will be hitting a fortune.
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