F L I P or K E E P C L U B
Which Strategy Is Right For You?
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You want to purchased a new property and haven’t yet decided what you want to do with it. Should you flip it for a quick profit and move on, or are you looking for a more long term commitment? Here are a few questions you should ask yourself to determine which strategy is right for you.
Do I want to be a Flip Real Estate Investors?A flip investor is looking to get into a property, fix it as quickly as possible and sell it for a profit. The faster this happens, the lower the carrying costs will be and the bigger profit he/she will make.
Do I want to be a KEEP Real Estate Investors?A Keep investor chooses to hold onto the property as a rental for cash flow. While they may see less profit initially, they’ll have a longer-term income stream from the property than a fix and flip investor.
Do The Benefits Outweigh the Risks? Flip Investor: The flip method has a single big return to the investor, and puts cash back into the investor’s pocket quickly. As the flip process takes place in a relatively short time, the investor is not subject to the normal market fluctuations in value over periods of time.
However, the flipper must keep a clear head when making financial decisions about the property. They should make sure not to overspend, or underspend on a property.
Keep Investor: Keeping real estate is a proven, long term strategy to assist in accumulating wealth and ensuring income flow for a prolonged period of time. Even if the property loses value over a period of time, it is well established that most property values rise in the long term, so the Keep investor is holding an appreciating asset and accumulating wealth, as long as they are willing to wait out market fluctuations.
Do I want to be a Flip Real Estate Investors?A flip investor is looking to get into a property, fix it as quickly as possible and sell it for a profit. The faster this happens, the lower the carrying costs will be and the bigger profit he/she will make.
Do I want to be a KEEP Real Estate Investors?A Keep investor chooses to hold onto the property as a rental for cash flow. While they may see less profit initially, they’ll have a longer-term income stream from the property than a fix and flip investor.
Do The Benefits Outweigh the Risks? Flip Investor: The flip method has a single big return to the investor, and puts cash back into the investor’s pocket quickly. As the flip process takes place in a relatively short time, the investor is not subject to the normal market fluctuations in value over periods of time.
However, the flipper must keep a clear head when making financial decisions about the property. They should make sure not to overspend, or underspend on a property.
Keep Investor: Keeping real estate is a proven, long term strategy to assist in accumulating wealth and ensuring income flow for a prolonged period of time. Even if the property loses value over a period of time, it is well established that most property values rise in the long term, so the Keep investor is holding an appreciating asset and accumulating wealth, as long as they are willing to wait out market fluctuations.
Keep These in Mind When Making Your Decision:K
Flip InvestorFlip investors must realistically project costs over time for a project and anticipate unforeseen expenses. In the flipping business, time is money. Delays will dramatically increase costs and decrease profits as extra months of carrying costs are incurred for such things as loan payments, property taxes, insurance, utilities, lawn care, etc.
In addition, certain neighborhoods mandate certain selling prices, regardless of what is done to the property. The road to wealth through investing in flipping houses is littered with investors who under-improved a property and could not sell, even at market value, or over-improved a property thinking it would sell far above the local market value.
Lastly, house flipping shows on television make it look very easy, and something that anyone can do – nothing can be further from the truth. No one should go into the real estate investment business without understanding how to best structure their flipping business, what the tax consequences may be, or the myriad of risks associated with embarking on a business based on a speculative value. Investing in flipping houses is not for everyone, so a new flipper should start with a very small property to make sure that they have the skill set and temperament for the process.
Keep InvestorMany keep real estate investors do not have the skill set to be property managers, so they either need to quickly learn the process (and the relevant landlord-tenant laws) or hire an outside property management company. A good property management company is well worth the costs, but a bad property management company can cost you time and money and cause a decrease in the value of the investment. Not to mention, bad property managers and bad tenants can allow for damage to the property, excess costs and reduced cash flow.
We recommend AirBnB services for vacation rentals in Jamaica. The properties we are developing in Jamaica are in high demand.
Flip InvestorFlip investors must realistically project costs over time for a project and anticipate unforeseen expenses. In the flipping business, time is money. Delays will dramatically increase costs and decrease profits as extra months of carrying costs are incurred for such things as loan payments, property taxes, insurance, utilities, lawn care, etc.
In addition, certain neighborhoods mandate certain selling prices, regardless of what is done to the property. The road to wealth through investing in flipping houses is littered with investors who under-improved a property and could not sell, even at market value, or over-improved a property thinking it would sell far above the local market value.
Lastly, house flipping shows on television make it look very easy, and something that anyone can do – nothing can be further from the truth. No one should go into the real estate investment business without understanding how to best structure their flipping business, what the tax consequences may be, or the myriad of risks associated with embarking on a business based on a speculative value. Investing in flipping houses is not for everyone, so a new flipper should start with a very small property to make sure that they have the skill set and temperament for the process.
Keep InvestorMany keep real estate investors do not have the skill set to be property managers, so they either need to quickly learn the process (and the relevant landlord-tenant laws) or hire an outside property management company. A good property management company is well worth the costs, but a bad property management company can cost you time and money and cause a decrease in the value of the investment. Not to mention, bad property managers and bad tenants can allow for damage to the property, excess costs and reduced cash flow.
We recommend AirBnB services for vacation rentals in Jamaica. The properties we are developing in Jamaica are in high demand.