Flipper or Landlord?

15Sep08

In past posts, we’ve devoted quite a bit of time to discussing how to get your team together to get started in the world of real estate investment. Once you have decided to start, though, and you have team members in place (or at least a few in mind), where do you go from there?

The key to any investment is to have a plan in place before you move forward. One key component of your plan should be how you plan to use your investment. While there are lots of ideas, you have two primary choices in the world of real estate investment:

• Turn your purchase into rental property and become a landlord
• Flip your home (on any timescale) and sell it for a profit

Before you can even consider making a property purchase, you should have your plan in place. One of the best parts about real estate investment (as opposed to other types of investment) is that a back-up plan or a back-up plan for your back-up plan is pretty easy to come buy. After all, you own a physical piece of property, not a sheet of paper that says you ‘own’ part of a company. As a result, even if your primary plan is to turn your purchase into rental property, if you need to sell it for some fast cash at some point, that’s always an option.

Before you decide which will be your primary plan, though, do some research. Both options are equally difficult ones. Renting a property in the Edmonton real estate market is a phenomenal idea. There are lots of potential tenants. Being a landlord, though, comes with its own set of rules and regulations. There are permits to file, tenants to please, and lots of overhead.

Flipping, on the other hand, has headaches of its own. It requires a huge time commitment. You’ll have to build a team of contractors to work with. There are always going to be set backs in budget and timeline. Moreover, you may have to deal with market fluctuations in a way that landlords just don’t.

Both real estate investment methods are great ideas. Investing in the market is easily one of the most stable ways to provide for your retirement or your child’s college fund. Before you start talking to your team, though, make sure you have some idea of where you’re headed with your project.

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Tags: Edmonton Real Estate Market, flipping properties, landlord, real estate investment