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Investment Properties - Should You Buy And Hold?

Property investing can appear to be a complicated issue, but that's only because there are so many decisions to make. As an investor, you have a virtually unlimited unlimited number of manners in which to profit. But that entails being able to choose wisely. You have to decide how much you'll educate yourself about each element of property investing, whom to add to your team, where to find properties, whether or not a particular property is the right one for you, and so on.

A key decision you'll inevitably face is how you'll use a property after you have purchased it. You might not be the kind of investor who wants to purchase a property and keep it in your possession it for an extended period of time. You may not want to have to deal with property managers and tenants or to see to the upkeep of a piece of real estate. If you don't see these kinds of activities as appealing in the slightest, your other option is flipping.

Flipping a property is selling it immediately after you buy it, perhaps even at the same closing. At the very latest, flippers generally start the selling process the day of the closing. Some even begin the process prior to even purchasing the property, which is very risky business. However one goes about doing this, flipping inevitably entails a frantic rush to the auction block, because an empty property always represents a liability.

However, if you hold a property, you are afforded the chance to increase its worth. If you manage to find a really great deal, the price you paid for it will probably represent only a tiny fraction of the amount you can potentially make off it. And when you finally decide to go ahead and sell it, you'll be able to do so at your leisure and get a higher price than you would've by flipping.

This is true particularly if the property is a multi-family residence like a high-rise apartment. If it is the right property in the right location, and you maintain it, chances are that occupancy is going to stay up. With a property like that, your earnings tend to grow exponentially. With good management, that is almost certain.

Speaking of property management, you'll have to decide between doing that yourself and hiring a management company to do that for you. If you are the owner of an especially sizable property, or if you own many pieces of property, you'll want to employ a property manager. Ken McElroy, author of “The ABCs of Real Estate Investing,” strongly suggests that you employ a property management company so that your time and effort will be put to better use elsewhere.

These are the kinds of things you'll need to consider if you hold a property.

Ultimately, however, whether you decide to flip a property or hold on to it hinges on how you'd prefer to spend your time. Perhaps you thrive on the fast-paced work that flipping entails. Perhaps this rush sounds like an adventure to you. In that case, you ought to educate yourself on the proper way to flip properties (i.e., wait until you own a property to arrange a sale and not to approach buyers at the very closing at which you purchased a property).

However, if the idea of maintaining a property seems appealing to you, then purchasing and holding may be right for you. Depending on your particular talents, you personally may be able to find it more profitable to work in one way as opposed to another. It's completely your decision.

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Alex Anderson Uses The MN MLS Real Estate Listings To Locate Minnesota Land For Sale. Get A Free Copy Of "The Investors' Rental Guide" At www.GreatInvestmentProperty.com

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