Buyers Resource
Real Estate investment strategies can range from flipping to buy and hold. There are benefits and disadvantages of each strategy.
Benefits of Flipping
Quick Profits – Investors that flip usually have a life cycle of 6 months to make their profits.
Liquidity – investors that flip will easily have multiple sources for liquidity, from hard money to
Better Opportunity Cost – Having liquidity allows the investor to find more opportunities
Nimble to Market – Flippers can easily exit the market if they foresee a downturn
Disadvantages of Flipping
Income Taxes – Gains are taxed yearly and usually at higher rates
More Work – Investors must rely on a lot of research to perform due diligence on properties.
They will also need to do inspections, repairs, and possibly eviction on each property.
Benefits of Buy and Hold
Stable income – Investors that buy and hold usually rent out their property for rental income.
Less Work – Many investors will just manage their asset for the long term.
Disadvantages of buy and Hold
Poor Liquidity – Unless they refinance their asset, investors are equity rich but liquidity poor.
Slow response to Market – This may be the most critical disadvantage if the market crashes.
Investors will have a harder time unloading their inventory if the properties are occupied.
Find off-market investment properties exclusive to our site:
Disclaimer: The information in this website is provided for general informational purposes only. No information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter.
