Investment Properties - Should You Buy And Hold?

Property investing can be viewed as a complex issue, however that is just since there are so many choices. When you invest, you have a virtually unlimited infinite number of ways to make money. That, however, means that you must be able to to choose wisely. You must choose how much you will educate yourself about each element of real estate investing, who you want on your team, where to find properties, whether or not a property is the right one for you—and on and on.

A key decision you will inevitably face is how you will use a piece of property once you have purchased it. You might not be the kind of real estate investor who wants to purchase a piece of property and hold on to it for a long time. Maybe you don't want to have to grapple with property managers and tenants or the maintenance of a piece of real estate. If these things do not appeal to you in the slightest, your other option is flipping.

Flipping a piece of property is simply the practice of selling it as soon as you buy it, often at the same closing. At the very latest, flippers generally start the selling process the day of the closing. Some will even begin the process prior to purchasing the property, though this is very risky business. However one goes about doing it, flipping inevitably involves hurrying to the auction block, as an empty piece of property is always a liability.

On the other hand, when you hold a piece of property, you are afforded the chance to increase that property's value. If you manage to find a really good deal, the price you paid for the property will probably represent only a drop in the bucket compared to the amount you stand to make from it. And when you finally decide to go ahead and sell it, you will be able to do so at your convenience and get more than you would have by flipping.

This is true especially if the piece of property is a multi-family dwelling such as a high-rise apartment. If it is a good property in a good area, and you maintain it, chances are that occupancy is going to stay high. With a piece of property like that, your profit tends to increase exponentially. If you manage your property well, this is virtually guaranteed.

Speaking of management, you will need to choose between performing that function yourself and hiring a management company to do that on your behalf. If you are the owner of a particularly sizable piece of property, or if you have many pieces of property, you will want to employ a manager. Ken McElroy, author of The ABCs of Real Estate Investing, suggests that you employ a real estate management company so your talents and your time can be used more efficiently elsewhere.

Those are the kinds of things you will need to keep in mind as a property owner.

In the end, however, no matter whether you choose to flip a piece of property or hold on to it hinges chiefly on what you'd rather spend your time doing. Perhaps you would enjoy the fast-paced work that flipping entails. Maybe the adrenaline rush sounds exciting to you. In that case, you should learn the right way to flip properties (i.e., wait till you actually own a piece of property to arrange a sale and don't approach buyers at the very closing where you purchased a piece of property).

However, if the idea of maintaining a piece of real estate seems like it would appeal to you, then purchasing and holding a property might be right for you. Depending on your skills and talents, you may be able to make more money working one way as opposed to another. It is totally your decision.

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