Listing Courtesy of BERKSHIRE HATHAWAY HOMESERVICES GALLO-R
When you own the Rehoboth Beach home your family lives in, you are by definition a real estate investor: it comes with the turf. Your investment is essentially a passive one. Until the day you decide to sell and move on, any improvement in its value is secondary to how well it serves to shelter your family.
How you think about your investment—and how you proceed to manage it—is altogether different when you buy a home purely as a financial venture. For one thing, you face an immediate strategic decision: will you be flipping for a quick short-term profit, or aim for the long term through a buy-and-hold strategy? You have to weigh some pros and cons in order to make the right decision.
Pro: Capital is Freed
A flipping strategy minimizes the amount of time your investment capital is committed, freeing it for other uses. Should you identify another potentially lucrative investment, you will be able to take advantage of it.
Con: Unexpected Challenges
While flipping for short-term profit has definite ‘hands-on’ appeal, first-time investors can be surprised by unexpected complications. Properties that appear to be undervalued (and ripe for a quick flip!) may require costly fixes. Overspending on renovations quickly eats into profits, but underspending can lead to a lengthier holding time. Experienced Rehoboth Beach flipping veterans have learned to successfully gauge a property’s true turnaround value.
Additional Consideration: Taxes
Sussex County flipping has tax implications that impact the bottom line. Profits from a property owned more than a year are generally taxed at the ordinary income tax rate, while a property held for less than a year may be taxed at the capital gains rate. Local and state tariffs need to be considered as well—this is where input from a qualified professional is important.
Pro: Passive Investment
If management is outsourced to a professional property manager, the buy-and-hold strategy will require less personal attention than flipping does. Preparing a property for a flip often involves considerable time commitment and adept contractor schedule-juggling.
Con: Management Costs
The passive investment advantage holds true if outside management is contemplated— with commensurate expense. If you enjoy the challenge of successfully managing a property, this negative doesn’t apply.
Pro: Fewer Properties Need To Be Identified
Ultimately, successfully executing a flipping strategy means scrutinizing a huge number of properties over the course of time. In contrast, a buy-and-hold strategy necessitates finding only a few great bargains. Pursued intelligently, both buy-and-hold and quick flip strategies have proved profitable for many investors. Both call for finding solid value in Bethany Beach properties—which is where giving me a call comes in!
With spring in the air, you don’t have to have your Delaware beach home for sale to catch the spring cleaning bug. Whether or not you’ve been cooped up inside for a longer-than-usual siege of the wintertime blues, as soon as the weather turns the corner, there seems to be a natural urge to open the windows and start freshening your place up.
Spring also brings the traditional hot selling season, and if you’re among those getting ready to list your own home for sale to take advantage of it, you’ll want to add extra attention to the traditional cleanup. Home for sale or not, you can channel some of your annual sprucing-up energy with one of these light renovation ideas. Each can add new zest to your living areas without breaking the bank:
You don’t have to be planning to list your home for sale in Sussex County to make 2014’s spring cleaning efforts a self-satisfying success. And if you’re planning to list, I have a host of other preparation tips…and a marketing plan designed to bring top results!