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Selling vs. Renting: How You Can Profit from Real Estate Investment

Man Looking at a Blackboard with Drawings of HousesA rising sought-after venture for investors at all levels is investing in real estate. One of the key reasons for this is that there are a lot of ways to profit from real estate investments. From buying and “flipping” properties to get instant cash to owning rental homes for long-term wealth building, there are seemingly limitless opportunities for making your Clarkstown real estate investments profitable.

The question of how to maximize profits, for most investors, boils down to two key options: selling versus renting. This article will delve into how real estate investors are profiting from both and which may be the superior option for different investing styles and situations.

Selling as an Investment Strategy

A significantly better way to profit from rental properties is to buy with a plan to sell. From the start, having the endgame for all of their investments in mind is what investors need. If one uses selling as an investment strategy, it shifts the focus from buying properties to hold and rent to buying properties that you plan to sell within a shorter amount of time. To prioritize selling as an investment strategy, you could do it through “flipping” a house. This means buying, renovating, and selling the property quickly.

Flipping houses, however, isn’t the only strategy investors use the profit from rental real estate. There are investors who will search for bargain properties that, with a bit of updating, could make great rental homes. Once the value goes up, either due to improvements or market appreciation, or both, they turn around and sell the property as a rental home to other investors.

For those looking to add to their investment portfolios without all the work of getting a property ready to rent, occupied rental homes can usually be successfully sold as turn-key business opportunities. Naturally, this strategy will only work if the purchase price is low enough or the market appreciates fast enough to result in the preferred outcome.

Renting as an Investment Strategy

Another investment strategy to gain income from real estate is to buy properties to hold and rent. This style, in general, is seen to be a much more effective strategy for long-term wealth building. This strategy permits investors to profit from rental houses by collecting rental income every month and then again when the property is going to be sold. However, the year-over-year profit might not look as big as the proceeds from a sale.

The proceeds from the sale of a long-term rental are more or less going to be higher since any debt against the property will have been paid down over time. But this depends on how long you hold the property and how well you prevent any severe economic downturns. Buying to hold and rent is probably the best option if you have the time to hold property and favor stability over quick payoffs.

Invest Like a Pro

Maybe the top reason some investors don’t find the buy-and-hold strategy appealing is dealing with tenants. It is customary that rental homes are managed by property owners, many of whom are not professional landlords and have little property maintenance skills. However, as Clarkstown professional property management companies have continued to grow and improve, several investors are looking to the experts to help them expand their profits. If the only reason you’re thinking of selling an investment property is that you’re tired of handling bad tenants, it may be time to hire a professional Clarkstown property manager to manage it for you.

We help rental property owners like you build real wealth through real estate investing at Real Property Management DePenn. To learn more about the services we offer, contact us online or call us at 866-820-9913.

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