The Ins and Outs of Flipping Houses

Posted by Admin | Real Estate Investing | Tuesday 12 July 2011 11:31 am

If you have watched numerous shows on television about flipping houses and making lots and lots of money in a very short amount of time you’ve probably thought to yourself that you could do that and possibly wondered why you haven’t. If you are contemplating entering into the world of real estate investing through the role of one who flips houses there are a few pros and cons that you might want to cautiously consider before taking the plunge.

Pros

1) Potential profits that are large and relatively quick.
Those who flip properties as a sole source of income can make in a few months what the average worker in this country makes in an entire year. The potential profits are great in this line of work for the successful house flipping team.

2)  Being your own boss.
This is within certain limits of course are some areas have strict zoning ordinances and code requirements that must be respected and adhered to when working on a house. Even so you maintain a large degree of control over all the decisions having to do with the flip.

3)  Getting to work with power tools.
There is that little kid in most of us that really loves the idea of playing with power tools. In fact, that is the deciding factor for many who have gone into this particular field of real estate investing in the past.

4) It’s hands on.
There are all kinds of different investments that you can put your money into but very few allow you to pour your heart, soul, blood, sweat, and tears into them the way that flipping a house does.

Cons

1)  Risk.
Real estate is a risky business in its own right. When you add the skills that are needed in order to flip a house, the wide variety of things that may go wrong during a flip, and the volatility of the market in general there is so much that can go wrong when it comes to flipping a house. You must be prepared to walk away with less than nothing in order to make the high dollar profits that a successful flip can bring to the table.

2) No easy out.
If you invest in stocks that go bad it is possible to pull your money out of that stock and go somewhere else. It is a little more difficult to do this when it comes to a house flip. You need to be prepared to see it through to the finish if you begin flipping a house.

3) Expenses.
It’s expensive to flip a house. You will need to come up with no small investment of your own in order to do this. It will take careful planning and diligent adherence to those plans in order to successfully flip a house but the rewards for your significant financial investment are most often well worth the effort.

4) Physical labor.
For many first time house flippers who are accustomed to office jobs the aches and pains and inexperience of muscles and hands to certain jobs prove painful both physically and financially. Not everyone is as skilled as the next guy when it comes to physical labor, carpentry, painting, installing floors, hanging cabinetry, and countless other skills you will be called upon to perform while in the process of flipping a house. You will occasionally need the help of skilled professionals and on occasion need large doses of your favorite muscle ache ointment.

Despite all the pros and cons many people around the world venture on their first house flipping adventure each and every day. The allure of quick rewards often outweigh the need for cautious prudence. But for many of these people their efforts will pay off. Are you ready to take the plunge or have you decided that a safer difference between you and the power tools just might be the best bet? If you decide to go the distance and flip your first house I wish you the best of luck.

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Can you save money by renting?

Posted by Admin | Real Estate Renting | Sunday 10 July 2011 2:48 pm


For a lot of renters the possibility of using a rental situation to save money is a strange idea. These renters often bemoan the fact that they have to lease a property rather than outright buy a property because they feel as though not securing the property is basically flushing money away each month. However, this is not entirely true. While there are certainly benefits to owning your own home and building equity homeowners can also benefit financially by renting their living abodes rather than purchasing a house.

While it is definitely true that money spent on rent each month does not get the renter any nearer to owning a home while each month, the  mortgage payment makes the homeowner that much closer to owning the property. However, this is not the whole story. Renters should also consider the amount of money they will be able to save each year for the purpose of purchasing a house by living in that rental property right now.

A Smaller Apartment Now Can Lead to a Bigger House Later

Some “would be” homeowners find renting a small apartment can allow them to start saving for the purpose of buying a house in the future. The ones who rent who are willing to sacrifice such things as comfort now and stay in the smallest apartment possible will likely be able to save the most money towards purchasing a home that suits them better.

In general the rental amount for an apartment is based on a value per square foot. This value may vary slightly from one property to the next but is likely to be very similar in properties in the same general area. This means apartments which are smaller in terms of square footage are likely to be less expensive overall. Therefore renters who would normally feel more comfortable and able to spread out might opt for a smaller apartment just so they can begin saving more money for their home purchase.

Create Your Budget Wisely to Save Money

Renters who want to save money for the purchase of a home while renting an apartment should understand their monthly rent is not the only medigating factor which may prevent them from saving money while they rent. For example monies spent on entertainment should carefully be considered when a renter is trying to save money. Most rental properties have a fully equipped kitchen making it ideal for the renter to prepare meals at home as opposed to going out to eat. Renters who cut down on eating dinner out may find they are able to save quite a bit of money each year.

Likewise renters who are spending an excess amount of money on superfluous items may have difficulty saving for a house while renting an apartment. Examining all current monthly expenditures can help the renter to determine where there is the potential for financial savings. Making changes such as debt consolidation may be one way to decrease monthly bills but this is certainly not the only solution. Renters can make other changes such as canceling subscriptions to premium movie channels, minimizing cell phone plans to include only the amount of minutes used each month and making changes to insurance plans to result in an overall savings. Changes to insurance plans may include having your car and renter’s insurance covered by the same carrier. Many carriers offer discounted services to renters who are willing to bundle their services. All of these slight changes can help to enable a renter to save money for a home purchase in the future.

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