Читать книгу Property Management Kit For Dummies - Robert S. Griswold - Страница 35

If you have ever had insomnia, you have likely seen infomercials about people who have made great fortunes buying and flipping properties. Although this concept is fundamentally sound, it is much easier said than done. Just as gamblers tell you only about their great wins, the reality is that many pitfalls await the novice. But there is a place for this type of real estate investor — another category of real estate ownership in which a competent and savvy property manager can make a real difference.

In a solid real estate market, you often find properties appreciating at an annual rate of 3 to 5 percent — a solid, sustainable rate of appreciation that rewards investors with long-term investment horizons who take the buy-and-hold approach with their real estate assets. This buy-and-hold strategy works and should always be the foundation of your wealth-building.

But in some areas, the demand for housing is so great that the limited supply of new and existing properties on the market is insufficient to meet demand. It’s in markets with high demand and rapidly escalating prices that real estate speculators with a buy-and-flip strategy tend to appear.

The buy-and-flip strategy can also work with existing homes or condominiums that the investor can purchase from a motivated seller at a wholesale price that’s below market value. The investor may not even have to close escrow before finding a buyer who’s willing to pay retail price. Some minor cosmetic work or simple improvements may be needed before reselling, but typically, buy-and-flip investors really make their money when they buy at a discount, renovate and then locate a buyer at full market value.

With the buy, fix, and refinance strategy, you invest in rental housing properties to which value can be added through repairs, upgrades, and improvements. You take a distressed property and turn it into a solid, well-maintained property with a good, stable tenant. Over the years, with increased equity in the property and as long as interest rates are attractive, you could refinance the property if you so choose and use some of your equity to make other real estate investments.

See Real Estate Investing For Dummies, 4th Edition (John Wiley & Sons, Inc.), which I co-wrote with Eric Tyson, for a full discussion of flipping versus our preferred strategy of serial home selling or even the more conventional and lower-risk strategy of buy, fix, and hold.