The Advantages of Renting Out

Long-Term Rental Income

The most important benefit of renting out your investment property rather than flipping it is the monthly rental income that you will gain from it. You can start making money from your rental property as soon as you get it in a rentable state and put it out on the market. As long as you are able to attract and retain tenants, you will be getting cash every month. Thus, investing in rental properties is an excellent way to secure your financial stability.

Paying for Your Mortgage

If you decide to buy a rental property through a mortgage, you don’t have to worry about the monthly payments as in a sense your tenants will be covering your monthly dues to the bank. A successful real estate investor has to make sure that the rent he/she is able to charge for his/her house exceeds the expenses associated with buying, running, and maintaining the property. A positive cash flow is a must with rental properties.

Easier to Finance

Speaking of mortgages, financing rental properties is much easier than financing fix and flips. Banks and other lenders like the fact that you will make money from your property so they are more inclined to give you a loan at a reasonable interest rate.

Natural Appreciation

Natural real estate appreciation will help you make even more money from your rental property when you finally decide to sell it. In this way, you get richer not only in the short term through rental income but also in the long term through appreciation. And you don’t have to do anything to benefit from this type of appreciation. It just happens – in nearly any real estate market – while you hold on to your property and rent it out.

Growing Your Investment Portfolio

As long as you have a positive cash flow property, you can use the extra cash to save up for a down payment on a second rental property. The more properties you hold as a real estate investor, the faster you will be able to save the money for new properties. That’s how rental properties offer you a way to expand your real estate investment portfolio without having to spend money from your pocket. Before you know it, you can be the proud owner of a bunch of rental properties and even be able to quit your 9-to-5 job.

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The Advantages of Fix and Flip

Quick Money

The number one pro of the fix and flip strategy is that you make fast money. You can conclude your whole endeavor in a few months and walk out of it several thousand dollars richer. As far as real estate goes, this is the fastest way to make money. And depending on how good you are at buying low and selling high and how much efforts you put into renovating the house, you can make a lot of money with this strategy.

No Long-Term Commitment

Some people were just not born for long-term business projects. They have no patience, they start losing sight of things, they get distracted with other endeavors… Flipping is the right approach for these people. Because of the short timeframe of fix and flips, investors do not have to commit to any particular property or even to the real estate business altogether.

No Need to Deal with Tenants

Some people are not people people and would make terrible landlords. Fix and flip eliminates the need to engage in long-term relations with tenants, property managers, etc. You still need to work with property sellers and buyers, agents, and contractors, but these relations are strictly business. With property flipping, you don’t have to worry about getting a bad tenant who will destroy your rental or someone who will be late with the rent each and every month.

Moving on to the Next Project

Because fix and flips generally take just a few months to complete, you can soon be on the next project you have in mind. Actually, as you gain experience, you can start going through a few projects each year. The money you make from one will be used to finance the next, bringing you even more cash in. So, there is an important potential to grow your business.

Forced Appreciation

Appreciation is one of the ways to make money in real estate. With fix and flip, you can make good use of forced appreciation by implementing improvements on the property to increase its value before you sell it.