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Real Estate Investors - Should You Buy And Hold?
By JACK of Cashsee.com

Real estate investing can appear to be a complicated issue, however that is just because there are so many choices to make. As an investor, you have an almost infinite array of manners in which to earn money. That, however, entails being able to choose wisely.

You must decide the extent to which you will learn regarding each element of property investing, whom to add to your team of experts, where to find properties, whether or not a property is the right one for you•and on and on. One question you will find yourself faced with is what you will do with a property after you've bought it. You might not be the kind of investor who wants to purchase a property and keep it in your possession it for a long time. You may not want to have to deal with tenants and property managers or the maintenance of a piece of real estate. If you don't see these kinds of activities as appealing in the slightest, the other option at your disposal is flipping.

Flipping a property is simply the practice of selling it immediately after you buy it, often at the same closing. At the very latest, flippers generally begin setting up a sale on a property the day that he or she purchases it. Some flipperswill even begin the process prior to buying the property, which is very risky business. However one chooses to approach the practice, flipping inevitably involves hurrying to the auction block, since a vacant property is always a liability.

However, when you hold a property, you get the opportunity to increase that property's worth. If you get a really good deal, the amount you've spent on it will likely represent only a drop in the bucket compared to what you can potentially make from it, and when you do decide to go ahead and sell it, you will be able to do so at your convenience and get a higher price than you would have by flipping.

This holds true particularly if the property is a multifamily residence such as an apartment high-rise. If it is a good property in a good area, and you maintain it, occupancy is probably going to stay high. With a property like that, your earnings tend to increase exponentially. If you manage your property well, that is almost assured.

On the topic of property management, you will have to decide whether you will perform that function yourself or hire a management company to do it for you. If you own a particularly large property, or if you have many pieces of property, you will have to hire a property manager. Ken McElroy, author of The ABCs of Investing, suggests that you hire a property management company so that your talents and your time will be put to better use elsewhere.

These are the kinds of things you will have to keep in mind if you hold a property. Ultimately, however, no matter whether you choose to flip a property or hold it hinges on what you would rather spend your time doing. Perhaps you would enjoy the fast-paced work that flipping represents. Maybe the adrenaline rush feels exciting to you.

If this is the case, you should educate yourself on the right way to flip properties (i.e., wait till you own a property to arrange a sale and not to approach buyers at the very closing at which you purchased a property). However, if the idea of nurturing a piece of seems appealing to you, then buying and holding may be the way to go. Depending on your skills and talents, you personally may be able to make more money working one way as opposed to another. It is completely up to you.


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