Home Flipping vs Real Estate Investing : The Wise Directory

Which is better: property flipping or real estate property investing?

To get to an answer, it may help to identify each phrase and put each one in perspective.

Home flipping is the strategy of acquiring a residence then reselling it at a profit in the smallest period possible. A house flipping pro aims to make the biggest amount of cash really fat by flipping the house, therefore the term is called house flipping.The house flipper does not hold on and rent the house. As a matter of fact, the shorter they hold the house, the better it is.

A real estate investor holds the home for rental income then either keeping the house for a while and selling or keeping it for rental income.

Investors in real estate buy real estate and intend on selling at some point, but usually hold the property for years or forever.

Which form of investing is the best for you and your family?

The main difference between the two investment schemes is that in house flipping, the investor is looking for quick profits and real estate investors want appreciation and income from rent

House flipping pros buy homes way below market. In doing it this way, the house flipper locks in fast profits.

Generally, the home will be sold at a cost substantially less than its selling price (within the range between 50%-90% of the market price).

Buying and renovating a home is the easiest way to house flip. The house flip pro purchase the house, quickly renovates it and then sells it under a month or so.

Renovating is much cheaper as one can precisely estimate the cost of materials and labor required to do it. It is usually easy to get specialists who grasp the exact renovations required and the house will look really good for a quick resale when it?s done.

This enables the house flipper to get a quick market for the house and at the same time fetching a very good price for the house.

House flipping tends to be simpler than buy and hold real estate investing because the flipper does not deal with landlord issues and the profit is made more quickly instead of it being done over time.

Depending on the market or community where a house flipper works in, more money can be made if the market allows for a quick sale. The real estate investor holds the property and rents it to renters, thus making cash flow instead of a quick buck.

With buy and hold real estate, the investor makes money through income, provided his expenses are less than his income from rent. A major advantage is if the market is poor he can hold on and receive income and not worry about resale.

Additionally, the buy and hold real estate investor can also leverage bulk buying of renovation materials if he is going to do multiple properties at once

I am purely biased, but house flipping is my preferred way of making money in real estate, what do you think?

For more information on how to make money house flipping, check out our website for more information real estate investing.

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