Flip or Hold Which One is Best

There are many ways to make money in real estate, but all the different methods boil down to two. The big decision in real estate is whether to flip a property for a fast profit or to hold on to the property for long term wealth.

The advantages of a flip are as follows:

You make a fast profit and can move on to the next deal. One of the downsides of holding a property is that you have to be a landlord. There is nothing more difficult to me than being a landlord. When I flip a property I don’t have to worry about collecting rent or fixing the property over and over. I don’t have to find someone to rent the property. There something to be said about a quick profit.

Finding a property to flip is fairly easy. Ugly properties are not hard to find, especially in the large cities. In Atlanta Georgia there are so many properties available for rehab and not enough investors.

Flipping a property is more interesting than find and hold. If you like excitement then flipping properties is your game. There are good times and bad times that come with flipping properties and it is never boring.

The disadvantages to a flip are as follows:

You will have to pay more taxes when you sell a flip. When you flip a property your profit will be taxed as ordinary income. This can be as much as forty percent of your profit.

Flipping a property means you must keep selling homes. The easy part of flipping is buying the property and then fixing it up. The hard part is selling the property.

The advantages of holding a property are as follows:

If you want long term appreciation then you need to buy and hold. There is no denying that if you buy a property at discount and then put a renter in the property for twenty years that you will have an investment that has appreciated tremendously.

Cash flow will come to the person who holds their properties for a long time. Positive cash flow usually takes time and if you are willing to wait a few years you will have a good monthly income.

The obvious problem with holding properties is being a landlord. If every renter stayed, paid on time, and never destroyed your home, then there would be no problems. Unfortunately you will have to find new tenants often. You will not collect all of the rent you are due. You will have to fix a property every once in a while.

The decision to flip or hold is a difficult one. I like to do both. If I find a home worth holding I hold it. If the property is too far away or needs too much work to be rental worthy then I will flip the property. Both have their good points and bad. The bottom line is that you need to be comfortable with your decision. Being a real estate investor should be fun first and an investment second. So do what you like most and feel best doing.

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