Flipping Versus Renting, what should you consider?
When investing in UK real estate, it is essential to understand all your alternatives to turn a profit, especially when the market has vast fluctuations caused by the Covid pandemic. You can rent out a property to cover your mortgage and build equity over time.
On the other hand, you could also develop your house and flip it to ensure that the sale is made quickly for a larger amount than you’ve invested. These two models are a great alternative, and thus, you must consider these crucial factors before you make your decision.
When to Flip
Do go into this on a whim! If you want to flip a house, you must have the required capital for investing in the property to make the repairs and renovations needed to appeal to its target audience. The process of flipping a house is challenging, and hence, you must have adequate experience (and determination) to understand what you are doing. Always do thorough research to know how the renovations will affect the value of your real estate.
Moreover, you must also learn whether the market in this area will assist your new price point. Purchasing and flipping a house in a housing market that is depressed or inflated will not be easy; you must do the flip in a community that is buyer-friendly to ensure a high return, but you must also ensure that the survey price supports your sale price. You’ll need to weigh up what level of investment will generate the most significant return for the area.
When to Rent
When you flip a house, you will get quick cash. On the other hand, renting comes with a monthly cash flow that enables a long-term profit since the property appreciates over time. You also have to decide whether or not you want to be a landlord. If you don’t have an issue with being a landlord and have adequate time to find reliable renters, renting out the property could be a better alternative.
This alternative also means that you will continue to own the home, and your asset will grow in value and form part of a retirement fund for later in life. You must consider additional upkeep costs, such as repairs, utilities and property taxes and any fees that come with being a landlord.
Whether to rent out or flip an investment property will rely on your specific interests- long-term or short-term. If you’re looking to invest UK real estate and you’re not sure which investment model suits you, please call us on 02382444293 or email info@gf-rp.co.uk for more information.
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