This is an age-old debate that continues to be hotly discussed with strong opinions on either side. Here is the truth of it. What you should do with your property depends on your goals. One route will work great for one person and not for another. You need to know what you are hoping to attain and build towards that.
Just like a healthy credit score is built through consistent steps like on-time payments and a solid credit reporting affiliate program, your goals need to be clear for you to build towards them. Are you looking for ongoing income? Are you hoping to make a quick turnaround on your investment? The answers to these questions will help you decide which is best.
Pros and Cons of Flipping Your Investment Property
- Quick turnaround on investment. Flipping a house can take as little as a few months. That means your investment, along with your profit, can be returned to you in a short time.
- No need for property management or tenant/landlord relationships.
- Although they are very simple and easy, there is no need to set up past ongoing rent credit reporting programs with tenants.
- The excitement of a new project and the hunt for the next deal.
- High tax rate. Capital gains taxes are some of the highest taxes you can pay and the profits on a house sale, in most cases, are considered capital gains.
- High up-front costs. Flipping a house often involves renovations and permits, which lead to higher costs than if you were simply renting that home.
- Active income, not passive income.
Conclusion: If you are looking to make some quick (ish) money, flipping houses may be the best choice for you.
Pros and Cons of Renting Your Investment Property
Renting your investment property, often called the buy-and-hold method, is a longer-term approach to real estate investing. There are substantial benefits to this approach as well as some downsides that should be considered before deciding what you want to do, or what kind of property you want to buy.
- Ongoing income. Rent for your property creates a passive cash flow. The majority of this will go to pay for expenses and debt servicing but you can create a healthy surplus if you do your homework right. By choosing the right location and offering perks like a credit reporting affiliate program, you can attract great tenants and charge premium rent prices. Past ongoing rent reporting gives your tenants a way to boost their credit scores, which can be a strong draw for many people.
- Tax benefits. As a landlord, you can write off the expenses of running your rental property, including the interest on your mortgage, office expenses and repairs.
- Increased property value and equity. As your tenants pay rent, you are building equity in a property you own. As property value typically increases over time, this investment will continue to grow with (hopefully) no large, additional influxes of cash from you.
- Vacancies. Vacancies are expensive. Avoid them at all costs. Entice great tenants with a credit reporting affiliate program to report their rent and boost their credit score. Have a solid screening process to choose only the best tenants for your property.
- Property management. Many people want the day-to-day management of the property to be left to someone else. This will be an extra cost and can cut into your profits.
- Late rent payments. This can be a challenge but it can be averted with the right processes in place. A credit reporting affiliate program allows you to report rent payments to all 3 credit bureaus. This past ongoing rent credit reporting is a great deterrent for tenants who would consider making a late rent payment. If they know that their payments affect their credit score, they will go the extra mile to pay them on time.
Conclusion: If you want to make passive and long-term income, renting may be the right choice for you.
Which is the Best Choice for You?
Investing in real estate is a great idea. How you choose to go about it depends on your goals. By knowing the pros and cons of both paths, you can choose the one that is right for you.
No matter your choice, CreditRentBoost.com is a leader in credit reporting affiliate programs that both entice tenants and protect landlords. With past ongoing rent credit reporting, you can protect your investment from late or missing payments and attract the best tenants to your properties.
Use past ongoing rent credit reporting to your benefit by reaching out to CreditRentBoost.com today and partner with the best credit reporting affiliate program around.