Real estate can be considered one of the best investments of all time. Although 2006-2007 gave us a rocky road in the housing market, the years leading up to 2015 have definitely given us good reason to now feel greater confidence to enter the market. If you happen to have been sitting on the sidelines these past few years, now is the time to jump in.
The past couple of years have shown that first time buyers are especially interested in buying real estate properties. The reasons are twofold. First, many homes can still be considered good deals; and second, the rental market has seen steady and solid growth, making it a great investment for those who have the ability to buy in.
We are also seeing many young people entering the arena of first time home buyers. For the most part, these are the early thirty-year-olds who for a long while decided to stay put in their parents home. They are now matured, established enough in their careers, and have stashed away a decent sized down payment to purchase a nice first home.
The Realtors at Best Real Estate Professional are rather optimistic for the real estate market in 2015. The momentum for home sales so far has shown a solid upward trend and that is expected to continue in the next months. Furthermore, the classic real estate moves of flip or hold have been on our Realtors’ radar for some time and here is their perspective for the current year.
Strategies to Consider
So now that you are ready to begin your journey to a real estate purchase, the thought that usually emerges is whether to buy a property for investment and gather rental income; or whether you should buy a property and flip the purchase for some extra cash. Naturally, there are certain factors to consider with both.
There is good consensus among analysts that the days of house flipping success are gone. Specifically, they point to hurdles that make the proposition of this kind of move rather disagreeable, they include:
- Shortages on money: Besides the renovations costs which you can expect in order to get the home to a state that it would be appealing enough for buyers, there are others that should not be overlooked. Interest charges, utility bills, and property taxes will all surely chip away at your bottom line. If you are lucky enough to sell the property in quick time and with limited expenses, do not underestimate the capital gains tax bill you will be slapped with at the end.
- Toll on Time: Just finding the right property for a successful flip, bringing it up to a sellable state, and putting it up on the market will all need an immense amount of allotted time. Many people conclude that it is probably easier to find other ways to earn some extra money, perhaps through a part-time job, which carry less uncertainty and no initial financial investment.
The caution when it comes to house flipping is that these kinds of projects can put a great deal of drain on your financial leverage and patience. For those who have little experience in this area, such properties can turn into money pits rather than jackpots.
On the other hand, a good majority of real estate investors are opting for the buy and hold alternative to house flipping. In particular, the appeal for buying and holding a property could include:
- Rent covers all expenses: Imagine if the monthly rent you collect is enough to cover the mortgage payment and any other incidental costs that are needed. No landlord would ask for anything more.
- Extra income: At a certain point, the rent coming in could actually be extra income for you and your family. Thus, you may have a sense of better financial freedom and not feel so completely reliant on your day job.
- You call the shots: Since you are the owner of the property, you can choose at any given time to sell it or keep it. This flexibility and personal choice allows you to have alternatives if any reason were to arise.
In short, the preference to house flip or buy a home for the long haul and rent it out is determined by a number of factors and most importantly, your approach to real estate. Both ways provide a means to earn some extra cash, but for now most remain partial to buying to hold.
If you think you are ready to explore the real estate market, our Realtors at Best Real Estate Professional can assist you in finding opportunities to match your desires. Our agents are located across the nation and specialize in their particular areas. Reach out to us to find out more.