We all want to grow rich – whether it is right away or over time. Before deciding if flipping or holding is best for you, you need to answer these questions:
- Are you getting into real estate investments to supplement your current income?
- Is real estate investing a possible career change?
- Are you looking to boost your savings?
- Do you want to diversify your savings portfolio?
The answer obviously depends your current financial shape. But, if you answered yes to any of the questions above, then real estate investing is for you.
Pros of being a Landlord
You Own It!
Imagine driving by your rentals and having the pride you own them all – that is a great feeling! Not to mention you’re helping people find a great place to rent for those who cannot afford to buy.
Flipping is a great way to have steady income as well, but that requires constantly having flip deals to engage in. But if you own multiple properties and all are giving you a positive cash flow, then you get a steady stream of income MONTHLY!
Having money in the bank is safe – but you cannot get the same level of return when that money is “parked” in a property. After a couple of years, you can sell that property for much higher than you bought it for, while getting hundreds of dollars every month. Some of the wealthiest individuals got their wealth through buy-and-hold real estate investing.
Cons of being a Landlord
Issues with Tenants!
Not all tenants will be great – not to mention legal issues. If they stop paying, and this will happen, you will likely need to higher an attorney to get your unpaid rent. Some tenants might leave your place is a mess and that means extra costs to clean up.
It’s a full time job
The more properties you amass, the more time will be required to make sure everything stays in check. Getting your rent on time, answering repair requests, drafting new leases, filling vacancies, and conducting property visits will eat up a lot of your time.
Usually, property values increase over time. But the 2008 recession is painful reminder of values decreasing. Though financial institutions have implanted stringent policies ever since to avoid the tragedy of 2008’s recession, the market can still be slow and values might not increase as you hoped – you are stuck with selling at a price that the market bears.