Rehabbing vs. Buy and Hold Real Estate - ZINC Financial, Inc.

by ZINC Financial
4 years ago
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Rehabbing houses and buy and hold investment strategies are two of the most popular ways to invest in real estate. While these strategies are quite different in their execution, there’s a lot of overlap in the skills and financial requirements of these types of investments. Often, the housing market dictates which form of investment might be preferable, though investors can find success with both strategies in virtually any housing climate.

Currently, the surge in fix and flip investing of 2013 is on the decline as fewer and fewer foreclosed and undervalued homes can be found on the market. Buy and hold real estate investing is stepping up to take its place thanks to the increasing stability of the housing market and the steady rise in renters.

Pros and Cons of Fix and Flip Investing

Rehabbing houses has the potential to net you about $100,000 in a matter of months in the state California. In fact, fix and flip investors in California made almost exactly that amount on average per flip in 2013. Of course, you have to subtract from that any costs that go into rehabbing the home, but even so, you could make tens of thousands of dollars flipping a house in California.

Those profits don’t come easily, however. To be successful at fix and flip investing, you need to be prepared to put in a great deal of time researching neighborhoods and specific homes that will be ideal investment opportunities. You also need to have the financial stability and backing to be able to make an offer, usually in cash, as soon as a house goes on the market. The most successful fix and flip investors are also either skilled contractors or have a network of trusted contractors and craftsmen ready to go.

Pros and Cons of Buy and Hold Investing

Buy and hold real estate seems to be the preferred choice of 2014 due to a number of factors. Homeownership is going down as more people choose to rent, but home prices are still on the rise. Additionally, rents are going up around the nation and are expected to increase by 2% this year alone. This means that with a buy and hold investment strategy, you can earn great returns on both your property and the monthly rent that you’ll collect from your tenants.

Buy and hold strategies require patience and either a knack for managing properties or a good property management firm. There’s always the risk that your property might lose value or that your rental home may lay vacant for longer than you’d hope, but with smart investing and a strong property management plan, investors stand to make excellent ROI on buy and hold strategies in the coming years.

Contact ZINC Financial today by calling 559.326.2509559.326.2509 to learn more about our rehab loans as well as our buy and hold loans. Through our newly redesigned buy and hold loan program, we’re currently offering loan rates as low as 7.49%, an incredible value for savvy investors.

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