Home prices are low right now, as you know. And from what I’m reading, they’re going to stay low through 2011 and into 2012.
So, are you thinking of snatching up one of these homes at a great bargain price, putting a little money into it, and reselling it for a nice fat profit? Think again. Those days are gone, at least for now.
I flipped a few along the way, back in the late 90’s and early 2000’s when the real estate market was booming. Aaah, those were the days. Back then, the foreclosure I just bought last fall would’ve been a perfect candidate for a flip. Purchase price, 35K. I put another 5K into fixups and it was ready to go. The homes around it are worth 80-85K. But! Who’s going to pay 80K when they can find a nice foreclosure for 30? No one in their right mind, that’s for sure.
So, I’m renting it out. And actually, there are thousands of homeowners who need to sell their homes and can’t — for a decent price — so they’re renting them out. They’re becoming unwilling landlords, poor things. At least the rent payment should cover the mortgage. The demand for rentals is strong and is driving the price up in most areas of the country.
So, if you think you’re going to make a fast buck by flipping a property, think again. Now is not the time and, if I were you, I wouldn’t hold my breath. If you want to make money, buy the bargain home and rent it out.
You won’t get the fat reward of the one-time payoff of a flip, but you’ll reap the nice tax breaks and steady stream of income the rental provides. I know, it’s not glamorous. But it works. 🙂
Onward and upward!