When Flipping Might Be Better Than Renting Out

Having to choose between flipping and renting out can be very confusing because both actions have advantages and disadvantages. Flipping involves selling the house you bought immediately for profit with or without making repairs, (yes there are houses you can sell without making repairs). Renting out meanwhile as the name implies involves renting out the house to a tenant to receive income with the option to sell if you want later in the future.

Although renting out seems many times more attractive because you get an income regularly and can sell the property in future for capital returns, there are instances when flipping might be to your advantage and these instances include:

#1.Insufficient Resources

Renting out requires having some resources such as baseline cash and whilst flipping might but not always require the availability of these resources. With renting, you need to have time to fix houses, to answer when your tenants have a problem, and you need to have money to make those fixtures and repairs as well as to advertise and perhaps hire a real estate agent.

Although you might need these even when you plan to flip the house, it would be to a relatively smaller degree.

#2. Low comparative rent

Before renting out a house, it is important to conduct a rental analysis. Conducting a comparative rent analysis involves finding out the average rent in the area where your potential rental apartment is situated. If the comparative rent in that location were low, flipping it would most likely be a better option.

#3.Good Market condition

The real estate market condition at the time you get that property also has a role to play in what you do with it. There are times the real estate market condition favors selling and other times selling would be risking a lot. Find out the real estate market condition if it is favorable, it might be best for you to flip that property.

#4.Unfavorable Location

The location of the house is also very important in many ways. For instance, a house that is considerably far from your house is probably not one you should rent out especially if you plan on maintaining it yourself because, you would have to get there if there are emergencies even in the night. Therefore a house located somewhere far from where you reside should probably be flipped instead of rented out.

In addition, a house that is remote, or not located close to amenities, schools or even job opportunities would most likely better be flipped because, where they are located has a great possibility of making it harder for you to get tenants, and having the house sitting empty would be a loss.

#4.House

The type and the age of the house could also be a determinant of what to do with it. An older house is likely to keep needing repairs regularly and that would be bad for you if you put tenants in it. Flipping such houses means saving yourself from the costs of numerous repairs whilst making money. In addition, some houses are better sold than rented because of the style or the features. Works of architecture or ridiculously large houses would better be sold than rented out.

Conclusion

Always remember that, if the house is not likely to make you money in the end and or you cannot see yourself owning it for a relatively long period, flipping it might be the better option. Do not feel pressured to become a Landlord if the house is not right for it. Flipping is equally good at bringing in profits.