Is it Better to Hold Rental Properties or Flip Houses?

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You can find a detailed article on this subject here: https://investfourmore.com/2013/04/19/is-it-better-to-fix-and-flip-houses-or-buy-and-hold-rentals/

I have flipped over 150 houses and bought 20 rentals. I love flipping and owning rentals, but which one is better? I think it is hard to compare the two strategies because they are both so different. Flipping houses is more of a job, and holding rentals is more of an investment. My strategy is to make money with house flips so that I can invest more money into rental properties.

Overall, I think the best way to invest is in rentals, but the more money you make, the more rentals you can buy. It helps to have a high paying job which flipping houses can provide. I have switched to buying more rentals or buying more houses based on the market as well. Some markets are better for flipping, while others are better for renting.

The market in Colorado took off the last couple of years making it tough to make money with residential rentals. However, I found that commercial rentals have better returns in my area and I have been investing in them lately. I am still flipping houses and buying rentals.

I think investors need to be careful with what properties they buy as rentals because you will have the property longer. Here is a great article on what to repair on a flip or rental. https://investfourmore.com/2013/10/02/how-to-repair-investment-property/

Here are some of my books that go into more detail on both.

Build a Rental Property Empire:
https://amzn.to/2LjBMOj

Fix and Flip Your Way to Financial Freedom
https://amzn.to/2rY6LY4

8 COMMENTS

  1. Depends on who You are.
    You can buy an hold and get property management or you can fix and flip. But Bosses do both!

  2. Mark could you do a video on how you determine comps/ARV for your flip deals? I believe you've done a lot of BPOs in the past? So a little guidance on how you use the MLS to determine value would be awesome – im in awe of how you do 10 ongoing flips every month and can determine so quickly their ARV with such a competitive market. thanks in advance!

  3. Do you ever go after tenants who trash their rental? Is it worth is to take them to small claims in your opinion?

  4. I know you said you had a goal of 100 rentals. SFHs if I recall. If you want that kind of scale, wouldn't you be better off buying a couple apartment buildings? You get economies of scale you don't get with SFHs. As a small time investor having 3-5 rentals would be great, but at 100 homes?? I think the apartment complex would be better. Just me thinking. Though you are doing commercial now (NNN and industrial), I don't believe you're doing commercial residential. Many ways to go about it though. I know a guy for instance who is killing it with self storage facilities.

  5. Do you lose money in rentals if you're not buying "below market value?"

    As long as the cash flow is not negative, I assume it's a good enough investment, correct? If you're making $0 but increasing equity, still a good enough investment???

  6. Do you typically buy single family homes for rentals or multi-unit? What’s better in your opinion?

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