Are you thinking about investing in real estate? If so, perhaps you’re weighing your options and wondering if wholesaling, renting, or flipping are your best options. If you’re thinking about flipping in Illinois then here are 4 advantages of flipping over holding in Chicago…
Flipping Over Holding — Advantage #1
The first advantage of flipping over holding is the quick turnover of income. You can invest in a flip on the first day of the month, make improvements through the following days, and then sell and be completely done with the property in just a couple of weeks or months.
This is a huge advantage because it means you don’t have to deal with a lot of problems that occur when you hold properties for a long period of time (such as maintenance and upkeep) plus you also get the benefit of generating your income regularly and getting a full return on your investment within weeks instead of having to wait years.
Flipping Over Holding — Advantage #2
The second advantage to flipping over holding is that you don’t have to deal with tenants. Investors who buy and hold real estate usually rent it out to tenants… and tenants come with problems! They don’t pay on time, they forgot to pay, they damage the property, and they sneak out in the middle of the night.
But with flipping, you’re only dealing with wood, nails, and drywall. These are things you control and you don’t have to worry about whether the tenant is going to steal from you.
Flipping Over Holding — Advantage #3
One of our favorite reasons for preferring flipping over holding is your ability to influence the selling price (and therefore your return). You see, with a rental property that you buy and hold, you’re limited by the rental income. You can’t charge more than what a tenant is willing to pay and there’s a limit to how much tenants are willing to pay! (And some areas of the country are even rent-controlled.)
But with flipping, you can knock down a wall or paint the walls or build a fence or add plants… and all to increase the value. and the best part is: the more you do, the more you can typically increase the value.
Flipping Over Holding — Advantage #4
Our other favorite reason for preferring flips over holding is the large pop of income. A rental property gives you only a few hundred dollars each month. You may invest thousands and eventually get it all back but in the meantime you only get a small trickle of cash flow month after month.
But with flipping (assuming you’ve bought low and sold high) you can make thousands of dollars at once. That’s a big pop of income each month!
If you’re debating about whether you should flip or hold, there are advantages and disadvantages to each. But these 4 advantages of flipping over holding in Chicago give you a compelling reason to seriously look at flipping as an option for you.