Austin Luxury Homes

A lot of new real estate investors think that they can flip any house that they buy and don’t take the time to really look at the property and think about what type of situation is the best for the property. Instead they try to force a flip on a property that might be better as a rental.  There’s really much more to being a successful real estate investor than just buying a house, fixing it up a little, and putting it back on the market. Sometimes those types of flips are very successful, but sometimes they’re not. Some properties are much more profitable for investors as rentals instead of sales.

There are several factors to consider when you’re looking at a possible investment property and trying to decide if it would turn a better profit as a rental or a sale home. The two most important things to consider when you’re deciding if a house should be a flip or a rental are:

The neighborhood – Do some research around the neighborhood and find out if most of the homes in the neighborhood are owner occupied or rented to tenants.  If the rest of the properties in the neighborhood are rentals then you probably wouldn’t get much interest in selling the home but you’d probably get a lot of interest in the home as a rental.

The property and the home – Is the house small with just one or two bedrooms, one full bath, and a small kitchen? If so there will probably not be much interest in buying the home. When people buy a new home they want to be able to see themselves still living in that home twenty years down the road.

They also might want to have additional room for children or to have a home business eventually, so a small home that only has one or two bedrooms and one bathroom is probably not going to draw a lot of buyers, unless there is enough property that you can add on another bedroom and probably another bathroom too.  If you want to add on then you have increase your flip budget significantly because it will take time and money to major work on the house. In that scenario it would be much more cost effective to make some cosmetic changes to the house and rent it instead of selling it.