Selling a property involves a lot of work. From finding the right kind of buyers to listing the property appropriately—a lot of effort and time goes into the process. Many sellers prefer fixing and flipping the property before selling it.
If you plan on doing the same, here are the pros and cons you should keep in mind:
One of the most apparent benefits of fixing and flipping is faster returns on money. You get to realize these gains very quickly compared to a buy and hold situation, allowing you to release enough capital for other purposes. In most cases, the fixing and flipping process takes about six months, so you can expect to earn money within this time frame.
Compared to most other types of investment transactions, flipping is a safer investment. Unlike stock markets and cryptocurrency, real estate doesn’t crash overnight. Real estate markets are also far more predictable. When you flip a property, you intend to keep your capital at risk for the least amount of time.
Compared to a conventional real estate transaction, you don’t need to go through the hassle of looking for tenants, running background checks, collecting rent, or managing the risks.
The only obvious con of fixing and flipping a property is the cost associated with the project. You don’t usually face these kinds of issues with other long-term investments. If you’re on a budget, the fixing and flipping can also lead to potential cash flow issues. This is also because the transaction costs are higher for both parties.
At times, the fixing process demands that home buyers give up their day jobs to get the work done. This again results in cash flow problems.
Besides, a quick property turnaround or sudden boost in income (as a result of the sale) can also increase your taxes. This especially happens if you were too fast to take advantage of the capital gain. When you own the property for less than a year, you also pay a higher capital gain tax.
In a nutshell
Whether you want to fix and flip your house or sell it as is, finding the right buyer is essential. If you’re unable to find one, Integrity Residential Solutions LLC would be glad to buy it from you!
The company buys real estate property in and around Akron / Canton. Unlike conventional realtors, they won’t list your property—they’ll buy them directly. Find more details on the company’s website.