tenants

Today, let's talk about buying, repairing, and flipping; versus buying, repairing, and renting. What is the benefits to both? What are your goals for buying houses at all? Is it because you want to become independently wealthy, owning lots of property, helping provide affordable housing to disadvantaged people, or is it perhaps a sense of pride in fixing up an undesirable house, and turning it into an example of exceptional workmanship?
One advantage to buying houses to "flip" is that you wouldn't have tenants if you sell right away. You wouldn't have tenants to destroy your newly remodeled house. Now, none of this is applicable if you purchase a commercial unit, so for the sake of discussion, let's talk only about residential applications. You wouldn't have to come back in and fix up any of the necessary repairs required after they leave your house. Even if they are immaculate tenants, they still would leave a few issues behind them that the security deposit should cover. All of this, is more time and money, and since time is money, it all equivalates to lots of money! We went through lots of these issues, and have found a solution that works for us. I will let you know later in a subsequent post. For today, we need to find out what the advantages are for selling versus renting.
Let's talk about the advantages of selling for right now. As we noted earlier, the first advantage for some people is not having tenants. Another advantage is making money quickly, without waiting so that you have capital to be able to buy another property to make money on. Another advantage might be so that you can terminate a relationship with a partner, and move on solo. And how about those wonderful monthly expenses that you will occur when you buy a property of any kind? You know, you don't hear about the downside with many of the real estate gurus out there. And yet, there are quite a few downsides, just as there are in any investment. These could include utilities, taxes, repair bills, insurance, incidentals (phone, fuel ,meals) etc. You also would not have to pay to have the mowing done, the snow removed, and any other outside maintenance done. How about those hidden defects that you didn't find while fixing up the property? These could include roofing, structural defects, plumbing, electrical, and/or HVAC. Many times, it is Murphy's law, that if the roof will develop a crack in it, or the heater decides to malfunction, it is right after you fix the property up! Depending on the location of the property, you also would not have the liability for the property after the sale occurs. We currently have a property in a local city, where about once every year and a half, someone drives by and takes off the front porch which we either have to fix it ourselves, or report it to the insurance company, and then put the porch back up. It is a definite downside for that property!
Let's talk about the pros of renting next post.
Don't forget to email any questions that you might have!