When investing in real estate, one common issue that needs pondering is whether to buy and sell or buy and hold. Both have their advantages and disadvantages. You should carefully research both options before deciding. Some key factors that you should consider would be the state of the market at the time and your investment goals. If you move carefully, both options will bring you good returns on investment. One will provide returns on investment within a short period of time, while the other option will help you gain great wealth over time.
Real Estate Investments:
More and more people are now investing in real estate. There are a number of reasons for this trend. Real estate provides a more predictable return rate than bonds and stocks so it is a preferable option. When investors are not sure about getting a return on their stocks and bonds, investing capital in real estate is an excellent choice. In a real estate environment, the equity created can help finance your other projects. It provides a cash flow when the property is rented out and also provides the opportunity to be used as a residence when needed.
Flipping:
The option of flipping ensures that your capital is tied up for the minimal amount of time. You can immediately realize the gains that you had hoped for. Real estate markets are much more easily predictable as compared to the stock market. Prices will not change drastically within the day.
Flipping properties is a low risk strategy. The capital you have invested is kept at a risk for a minimal amount of time. Also, there is no hassle of management and leasing in flipping.
The second type of property is the fixer. These properties have design or structural issues that you can overcome to increase the value. For this option, you can enhance or remodel a property.
Flipping is better suited to people who want to take advantage of short-term opportunities in the market. You should only be looking to get returns on your investment as long as the current market allows. This option is not feasible for long-term. There are also tax management and cash flow issues.
Holding:
Buying a land and holding it is said to be a sure method of making money. Even if land prices go down, they will almost certainly go back up as land is limited. Some complications arise with long-term real estate ownership. There are management issues. Legalities are also involved.
Holding a property is only an option for those who have long-term investment goals. They should be clear that the capital is going to be in a risky state for a long time. If you are considering amassing wealth from your real estate investments, then holding is the thing for you.
