We’d like some advice from active investors. Do you think it’s a good time to be buying to hold and manage property or do you think buy to flip is better at this time? Is this a timing choice or is it more a matter of personal choice and investing style?
Wow, what a question. I guess it depends on where you live. I live in South Florida and this is the best buying opportunity in the last 40 years. Prices are in free fall. Banks and home owners will do anything to get rid of property.
I am actively soliciting for partners to JV buy and hold deals with my company as I don’t have enough cash to buy all the deals I am seeing.
Some of them are good to flip and some will be great buy and hold properties. If you buy them right in the right areas there will be some awesome profits once this current situation straightens out.
The big mistake many investors make is trying always buy at the bottom and sell at the top. A famous investor, Bernard Baruch, said “Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars. … I made my money by selling too soon and buying too late.”
Heed this advice and you will prosper.
I think both timing and personal choice play into your decision. What do you WANT to do? Some people absolutely don’t want to be a landlord and deal with tenants. So for personal choice, I’d go with what you want to do.
Many different markets have falling prices and a flood of homes on the market due to foreclosures and many other homes priced too high. In a time when homes aren’t moving well and there’s a large inventory, I would think flipping would be more difficult than in a seller’s market. That’s not to say there aren’t people out there still flipping houses successfully, because I’m sure there are. I’m just saying it would probably be more difficult to move a house quickly today (in certain markets).
Someone here likes to say that real estate is local. It’s very true. What you hear is happening in someone else’s market is not necessarily what’s happening in yours. If you buy right and hold for rental, you shouldn’t be too concerned with market fluctuations as you’ll be holding for many years.
Basically you want to buy when everyone is selling and sell when everyone is buying. That holds true in all types of investing. If your local market is still hot, you can certainly flip. If not, you have the choice to buy/rehab/rent/hold. You don’t want to be trying to sell a house quickly in a down market. It really boils down to 2 things.
- Your willingness to be a landlord or hire a property manager.
- Your local market conditions.
Keep in mind that if you try to flip in a down market and find that your house isn’t selling quickly, you may HAVE to be a landlord just to cover your holding costs… I like rentals. Especially ones that need just a little work that you can get for a bargain. A good property manager takes away many of the day to day headaches of landlording. Just be sure the property can pay the cost and still have positive cashflow. Good luck. :beer