Housing is taking off with rising home prices and interest rates. Is it time to switch real estate investing strategies from renting properties to flipping homes? The new boom is providing real estate investors with another chance to succeed. Make sure you take advantage of it.
Some real estate investors are already asking whether the market has improved enough to stop loading up on rental properties and move to flipping homes instead. So what’s the answer?
There is no question that home prices and mortgage rates in most parts of the United States are on the way up. So does this mean that rentals are no longer a viable strategy?
In some cases, those buying homes at top of the market prices with high interest rate loans could be seeing cap rates dwindle.
However, being on the front end of a new decade with improving housing rents and home values (equity) will only keep going up too.
For those buying rental properties sensibly, and with reasonable financing, there is plenty of room for growth, wealth building and positive cash flow.
Of course, some aging rental property owners may see this as a good time to exit while demand is high and cap rates are good. Accordingly, no one ought to be buying negative cash flow properties unless they are really confident in their ability to pick up the slack.
Those looking for better cash on cash returns and faster wealth building, flipping homes could certainly be a smart real estate investing strategy to adopt. Rising home prices and rates will mean little to those that are wholesaling or flipping homes due to the short hold periods. Plus, there are still many thousands of undervalued and distressed homes across the nation which offer great spreads for bargain hunters.
Those still keen on rentals can also look for alternative financing sources, besides main street banks, for more attractive loan terms and interest rates.
So yes, it’s a great time to get into flipping homes, but buy and hold properties are far from dead.