Facts About Property Flipping and Buy-to-Let and the Best Choice.
There are two options to select from when opting to invest in real estate. Flipping is one option which entails buying the property and uplifting its value by different corrective measures and selling it 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 is a huge tussle of opinions on which of the two options is the best money making idea in the real estate market. None outweighs the other by far and therefore both are applicable and for this reason I have outlined below the best and bad sides of the two that you may do the picking. There is a false assumption that real estate only involves flipping property. The main characteristic of flipping property is that you get the returns of your investment really fast.
As above mentioned, you can buy a property and engage in activities to increase its market value like renovation and sell it at a profit all within a period of less than two years. It comes with a feeling that your investment is worthless because you don’t have to wait long to get the fruits of your investment because investment is believed by most people to only realize long term goals. The downside of property flipping is it has an easy lay out but very hard to realize.
The plan on paper seems easy because it does not take to account the obstacles in the real life situation making it even hard to realize. To begin with, you have to look for a property that on top of being priced reasonably, has room for improvement which you seek to correct to realize that profit. The next step is doing calculations just to be sure you do not spend too much money on the improvements and at the same time making certain you gain some profit from it. The last yet quite stressful step is finding that suitable buyer because most people are looking to rent a property rather than buying which is very costly.
The concept of Buy-to-Let has been around for centuries as the more popular of the two choices. Due to its long term basis, renting out property has gained popularity among people. It may also create room to do flipping in future because there are no restrictions in place. Commercial investors realty commonly opt for this because they only need to relax and await payment of rent.
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.