The Best Money Saving Option Between Property Flipping and Buy-to-Let.
Investing in real estate can take two forms which you can put to use to make money. You can choose to buy the property and increasing its market value by corrective activities and selling it to a buyer at a higher price to gain profit, a concept known as flipping. The second option is the concept of Buy-to-Let which simply means that after purchasing a property, you go ahead to rent it to tenants.
The real estate world is experiencing heated arguments on which of the two is the better option. There is never an real answer as to which of the two is better and below are the features and drawbacks of each so that you may do the picking. More often than not, people relate property flipping to real estate investments but it is not the only one. What happens here is that you get the returns of your investment in a very short time compared to the later.
Flipping property can be done within a short period of two years after buying the property and doing the improvements like renovation. Flipping property is not opted for because It usually brings the feeling that your investment was not worth it mainly due to the preconceived notion that investments should only be long-time. The downside of property flipping is it has an easy lay out but very hard to realize.
It may seem quite easy on paper but the obstacles on the practical market are proving it very 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. You then have to evaluate the cost of your repairs and improvements to ensure you don’t run at a loss nor spend too much money on the improvements. 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. The reason for this is that renting property guarantees a long term in stream of money in the form of rent over a long period of time. It is also more applicable because there is no restriction to later increasing the value of the property and sell it at a profit making even more money. 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. Providing good living and working conditions for your tenants is paramount and may prove to be expensive. 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.
Both ways are awesome ways of making money and your choice should be aligned with your own personal requirements.