When you make an investment in Chicago real estate, it’s important to consider your options for turning a profit even before you write an offer.
It might be best to rent out the property to cover your mortgage and build equity providing the home cash-flows with solid rents and demand.
Or, you could fix up the home and flip it so that you can sell it quickly for a larger amount than you invested.
Both strategies may be appealing options, so here are some important factors to consider before making your decision.
Flipping May Lead To Short Term Profits
Flipping a house can be tricky, so you will want to have enough experience to know what you are doing, or work with an experienced advisor who can guide you around the most common pitfalls.
If you are thinking about fixing and flipping a house, you will need to have enough capital to invest in the property so you can make the required improvements and repairs.
Many people find themselves short of working capital after closing on the new purchase.
It is important to factor in carrying costs, or monthly mortgage payments while fixing the home, into your overall budget.
Do your research so you’ll know what renovations will have the most impact on the value of your real estate.
You will also need to know if the market in the area will support your new price point.
Make sure your flip property is in a very buyer-friendly community for your best chances of a positive return.
Renting Is The Buy And Hold Strategy For Investment Real Estate
Flipping a house gives you quick cash, but renting it out instead may give you monthly cash flow and a potentially larger long-term profit if the property appreciates over time.
If you don’t mind being a landlord and you have the time to screen for reliable renters, then renting out the property might be a better option for you.
This option also means that you will have the home later on in case you want to live in it.
Of course, don’t forget to factor in additional upkeep costs, such as repairs, utilities and property taxes.
Seek Professional Counsel
Investment real estate has consistently been considered a solid way to get your money working for you.
Whether you rent out or flip your investment property will depend on whether you are interested in a long-term investment or a short-term project.
A great next step while you are planning your investment real estate purchase would be seeking the advice of a qualified, licensed real estate professional.