Flip It or Rent It, Create Larger Profits through Real Estate Investing

By:Kevin Kiene

Real estate is a tried and true investment that offers both short-term and long-term gains. Before you purchase a property, you will have to determine if it is best to flip the property, make improvements and sell it fast, or rent it out. We all know the market fluctuates; even people who are not involved in real estate investing know the terms "buyer's market" and "seller's market". Which decision you make depends on what is happening in the market and how much the property costs.

How to Know When to Flip a Property
House flipping can provide huge profits if you do it right. Key factors are the purchase price, the location and condition of the property, and what similar homes in the area are selling for (and how fast!).

Generally speaking, if you plan to purchase a home with a high price tag, your best bet is to turn it around quickly. Expensive homes come with big mortgage and property tax payments, which usually rules out much if any cash flow for renting. It can also be difficult to find renters for higher priced homes, and if they miss a rent payment for one or several months, not only can all your profits disappear, you may take a loss.

If you find a great property that requires mostly cosmetic changes, you should be able to flip it easily for a nice profit. A property with major structural problems can be a "money pit", especially if the price was high to begin with. Before you commit to any major repair, assess not only your cash resources, but also your work force resources. Do you have relationships with contractors, landscapers, and other skilled labor professionals?

How to Know When to Rent a Property
Renting your investment property can provide you with monthly cash flow while you build equity. Renting also allows you to take advantage of tax breaks for any improvements you make to the property. Again, key factors are the price of the home, if the market has growth potential, and the condition of the property.

A lower-priced home translates to a lower monthly payment, property taxes and insurance. Remember, you don't need to make a huge profit every month, the idea here is you can own more properties and make your profits over time. When you rent a property out, you are building equity using your tenant's money. Add up the costs related to the property, including a small amount for repairs and any utilities you plan to pay for. This is a safer way to invest in Real Estate and can net you very high profits.

Another way to determine if you should flip or rent is if the market is growing. Does the area have a lot of new construction? Are there new industries moving in? Is the location near an urban area, with plans for an existing public transportation system to the city? Properties located in these "growth" areas almost always net the largest gains over time.

In a growth market, you can make money flipping a house, but you may be able to make considerably more money if you rent it out, build equity, and sell it for an even higher price at the optimum time. Even if you buy yourself a vacation home, you can make money down the road if you hold on to it, and you can rent it out as a vacation home or to tourists when you do not plan to live there.

It's Not Just About the Bottom Line
When deciding whether to flip or rent out a property, assess the market, do the math, and then consider your own interests and abilities. The perfect flip is not so perfect for those who have no construction or renovation experience, and being a landlord may not be a role you wish to take on. In the end, it's about what's best for your pocketbook, and what's best for you.

Digg del.icio.us Blink Stumble Spurl Reddit Netscape Furl

Article keywords: free legal forms, rental agreement, landlord forms, lease agreement, rental forms

Article Source: http://www.articles2k.com

Limited time offer, download Free Landlord Forms! Make more money every month and take control of every rental situation from the industry leader in Landlord Forms. Create a State Specific Lease or Rental Agreement online and download a complete library of rental forms. http://www.ezlandlordforms.com

Top Wealth Building Articles
1). Start Saving Money...Now! By : Mike Collins Could you use more money? Of course, who couldn't? Whether you are overwhelmed with bills and expenses or just looking to save some extra cash for a nice family vacation, you basically have just two choices: 1. Make more money. 2. Lower your bills. Making more money is easier said than done. Most people only get a salary increase that barely covers inflation and the increased cost of living.
2). Where You Can Save Money With Your Sewing By : ctb Everyone likes to save money. With your sewing, it is easier to do than you might think. And…think about this, the more you save, the more you will have put aside when you want that special fabric or that new sewing machine. Here are a few ideas to help you save money with your sewing that you may not have thought of. Save buttons, zippers etc from clothing that has worn out.
3). Making Millions, Your Chance in a Lifetime By : Daegan Smith Do you have a wish list? How far have you gone in your wish list? Let me share to you this one:
4). Becoming a millionaire is easy! By : James C. Samans Every year, thousands of new graduates receive their degrees from colleges and universities across the United States and enter the workforce. When you get your first job, you might be inclined to focus on salary and advancement opportunities and ignore that “boring” stuff about your new employer’s 401(k) plan. Hey, wake up! Pay attention! That’s your future.
5). Take the 7 Steps to Riches By : Daegan Smith There are many perks and pleasures in this lifetime that we desire for ourselves and for our family. They do not come easily. They have to be earned and worked hard for. That is why most people if not all are aiming to make it big.
6). Asset Protection: Some Tips To Protect Your Wealth By : John Thompson In business and accounting an asset is anything owned, whether in possession or by right to take possession, by a person or a group acting together, e.g. a company, the measurement of which can be expressed in monetary terms. Assets are listed on the balance sheet. Since assets represent every material possession that a person or a company has, some steps should be taken in order to protect them.
7). Leverage Is The Only Way To Wealth By : Francis Kier To build any serious income you have to use leverage. You accomplish this by spending your time creating and managing levers. I’d bet that if you are creative enough, you could probably create a lever on anything that can provide an income. Let me explain this with several examples. If you do not have an employee, you are not leveraging your time. Start leveraging your time in a tiny way with something that doesn’t require complex skills, like a dog walking service.
8). Why I Love Get Rich Quick Schemes By : Daegan Smith Everyone is so focused on money that their common sense is blinded by the ka-chings of the dollar signs going off in their heads. Some get rich schemes are so insultingly stupid that you couldnít think anyone would fall for it. However, there are a few gullible people out there that still go for it.
9). The 7 secret keys to wealth - Key #6: Specialization. By : Nathaniel This article is one out of seven that I wrote about wealth. The whole series contain a lot of free valuable information about key factors that can help you become wealthy. The rich do things in a different way. That difference is the one I want to explain here. Let’s scrutinize together these strategies that can make you more money and help you boost your income.
10). Make Money Fast – How Mr Average Can Make a Million By : Sacha Tarkovsky If you want to make money fast and become a millionaire and you’re an average investor, you either have to be lucky (don’t count on it) or know the golden rule of building wealth and find a way to put it to work for you. Let’s find out what it is and how to apply it to make money fast. The golden rule is use compound growth which lets your capital build at an ever quicker rate.

New Wealth Building Articles
1). Investing For Your Retirement By : Mika Hamilton Who wants to think about getting old! This is probably the most common reason given when individuals are asked about whether they have planned for their retirement.
2). Asset Protection By : Steven Rich WHAT IS ASSET PROTECTION? By: Steven Rich, MBA Marketing Manager for Panama Offshore Legal Serevices Everyone should be afraid of being sued with so many lawsuits being filed now days around the world. You might think that you may never be sued. How wrong you are! Let's first take a look at how easy it is to be sued now days. One of the first dangers is being indirectly involved with a lawsuit.
3). The Automatic Wealth Building Habit By : Dan Robey Can you really build wealth automatically? The answer is yes...you just need to acquire a new wealth building habit. You are going to love this habit because you do not even have to remember it...a banking computer remembers the habit for you! How is that possible? Read on and you will soon see. Here is how the automatic wealth building habit works.
4). Scientific wealth building secrets! - #1 - Entropy By : Nathaniel This is a series of articles about studying general scientific ideas to create a wealth building system that works according to the laws of the Universe. These concepts come from observing our environment. Scientists have discovered that the laws of nature follow certain patterns. Some physical laws seem to be present everywhere, from the tiny atoms to the enormous stars.
5). Scientific wealth building secrets! - #2 - Life By : Nathaniel This is a series of articles about studying general scientific ideas to create a wealth building system that works according to the laws of the Universe. These concepts come from observing our environment. Scientists have discovered that the laws of nature follow certain patterns. Some physical laws seem to be present everywhere, from the tiny atoms to the enormous stars.
6). Scientific wealth building secrets! - #3 - Multiplication By : Nathaniel This is a series of articles about studying general scientific ideas to create a wealth building system that works according to the laws of the Universe. These concepts come from observing our environment. Scientists have discovered that the laws of nature follow certain patterns. Some physical laws seem to be present everywhere, from the tiny atoms to the enormous stars.
7). Scientific wealth building secrets! - #4 - Synergism By : Nathaniel This is a series of articles about studying general scientific ideas to create a wealth building system that works according to the laws of the Universe. These concepts come from observing our environment. Scientists have discovered that the laws of nature follow certain patterns. Some physical laws seem to be present everywhere, from the tiny atoms to the enormous stars.
8). Scientific wealth building secrets! - #5 - Inertia By : Nathaniel This is a series of articles about studying general scientific ideas to create a wealth building system that works according to the laws of the Universe. These concepts come from observing our environment. Scientists have discovered that the laws of nature follow certain patterns. Some physical laws seem to be present everywhere, from the tiny atoms to the enormous stars.
9). Scientific wealth building secrets! - #6 - Gravity By : Nathaniel This is a series of articles about studying general scientific ideas to create a wealth building system that works according to the laws of the Universe. These concepts come from observing our environment. Scientists have discovered that the laws of nature follow certain patterns. Some physical laws seem to be present everywhere, from the tiny atoms to the enormous stars.
10). Scientific wealth building secrets! - #7 - Diversification By : Nathaniel This is a series of articles about studying general scientific ideas to create a wealth building system that works according to the laws of the Universe. These concepts come from observing our environment. Scientists have discovered that the laws of nature follow certain patterns. Some physical laws seem to be present everywhere, from the tiny atoms to the enormous stars.