We buy houses in Dana Point California. We are CA home buyers who pay cash for houses in Dana Point. Of all possible ways of participating in the real estate investment market, the most prominent and common are house flipping and long-term investing. Because of the popularity of TV shows like Flip This House, restoring and flipping homes have become immensely popular in recent years.
Now, there are still many advantages to the tried-and-true (and steady) system of buying and holding real estate investment. But how do you decide to fix and flip or buy and hold?
Fix And Flip Or Buy And Hold A House: 3 Differences In Dana Point CA
First, There Are Several Sound Reasons For Investing In CA Real Estate:
- Returns for stocks/bonds are more predictable than returns.
- This offers an inflation shield.
- The resulting equity enables additional investment opportunities to be financed.
- If other investment sources are volatile and unpredictable, this provides a safe place for capital to remain.
So let’s look at some of the differences between the two methods of real estate investment in Dana Point.
The Time Factor In Dana Point
The best thing about flipping houses is without a doubt that you don’t have to keep the capital of an investor/lender tied for long periods of time. In a relatively short time, you can realize a return on investment–because the goal is to rehabilitate the home and sell it as quickly as possible. If conditions are right, after just a few months, you can realize a profit of, say, $30,000.
On the other hand, it takes much longer for you to see any significant return on investment, often years, with the buy-and-hold method. More often than not, investors in this area rely on market appreciation rather than capital appreciation. With few exceptions, the longer-term value of real estate increases. So the longer a property is owned, the greater the probability of appreciation and, eventually, profit
The Risk Factor In Your CA Home
Risk is very often the deciding factor for many people when it comes to choosing whether to fix and flip or purchase and hold. Nonetheless, high-risk investments also yield the greatest profit
A bit of research will allow a real estate investor to predict the short-term direction of the Dana Point real estate market fairly accurately. The fix-and-flip approach, therefore, carries little risk in that respect. But –and this is a big “but” –most homes are distressed properties that are bought for fixing and flipping purposes. And that means you can quickly get over your head if you don’t have experience and know what you’re doing. And then spending on treatment would easily outweigh any potential income.
However, buy-and-hold properties will be vulnerable to fluctuations in the market. And if you’re forced to sell when the market is down for whatever reason, you’re going to lose money. But as markets have trended upward over longer periods, this method has made many fortunes. In addition, buying and holding and then renting provides a steady, predictable income stream with less risk and volatility than having everything hanging on a property’s sale, as is the case with flipping.
The Hassle Factor In California
But perhaps you just want to go with the headache-less, trouble-free route. Both methods have their advantages and disadvantages.
You’re never going to have to deal with renters with fixing and flipping, which can be a huge hassle and headache. But you will also have to wade through many more transactions and pay the transaction costs associated with them.
Most often buying and holding involves dealing with renters, along with all the inevitable issues of law and management. And that means you’re going to have the trouble to find and keep good tenants. Nevertheless, this method will provide you with a reliable income without having to flip a house in a certain amount of time.
Sell My House In Dana Point CA
Hopefully, if you’re trying to decide whether to fix and flip or purchase and hold in Dana Point, the differences we’ve outlined above will help you make the best investment decision. If you’ve decided to sell your house in CA, call Premier Property Buyers. We are your local homebuyers in California and we can close in as fast as 7 days!