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Old 08-25-2021, 09:26 AM
 
Location: State of Transition
91,048 posts, read 87,757,854 times
Reputation: 98346

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Quote:
Originally Posted by tommy64 View Post
Why would someone buy a house to fix up and sell for a quick buck when they could keep it as a rental and take a slower but steady income, plus any equity capture as any loan principal pays down and values notch up?

The acquisition costs, fix-up costs, closing costs, capital gains tax and risk if anything falls through looks like a short-sighted way to make (in many cases) no more than a General Contractor.

Real wealth is built over time as assets appreciate in value. Rents almost always increase. Real estate is easy to borrow against because of the self-collateralization. How much better does it get? Why would anyone let something so valuable go for a quick hit of cash?

Any thoughts from the flipper crowd?
Some flippers are RE agents. They swoop down on what they view as an undervalued property (compared to its potential, if spiffed up), invest their money, the get it on the market and out of their hands ASAP, to make their windfall and move on to the next project. They have no interest in acquiring an empire of rentals. Managing rentals can be a real pain.
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Old 08-25-2021, 12:01 PM
 
1,735 posts, read 1,355,287 times
Reputation: 2623
I prefer to buy and hold myself, but sometimes the numbers don't work for a rental but work great for a flip. If the taxes are high you may only clear $250 a month in cashflow, now yes it's basically tax free and there's appreciation and mortgage paydown which I get. So lets say you make $10k that first year, or you could flip the place and make $40k. 4 years of profit rolled into the next place.

All depends.
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Old 08-27-2021, 08:28 PM
 
Location: Gettysburg, PA
2,289 posts, read 2,148,733 times
Reputation: 5093
Quote:
Originally Posted by tommy64 View Post
Why would someone buy a house to fix up and sell for a quick buck when they could keep it as a rental and take a slower but steady income, plus any equity capture as any loan principal pays down and values notch up?

The acquisition costs, fix-up costs, closing costs, capital gains tax and risk if anything falls through looks like a short-sighted way to make (in many cases) no more than a General Contractor.

Real wealth is built over time as assets appreciate in value. Rents almost always increase. Real estate is easy to borrow against because of the self-collateralization. How much better does it get? Why would anyone let something so valuable go for a quick hit of cash?

Any thoughts from the flipper crowd?
Yes, actually (though I'm quite sure this has been commented on already, just don't have time to read through the thread). I would never be a landlord for a regular long-term rental. I have heard enough horror stories. A vacation rental, I hope to one day; you just have a different clientele, generally.

Though I'm not a house flipper (yet--maybe one day, I would love to!) I enjoy fixing up a out-dated looking house. It is like a hobby to me. I may not make as much, but while I'm doing remodeling and fixing up things, I'm enjoying what I'm doing. So it's just not all about the money. It's nice to make a good amount in selling your house for more than what you bought it for; that is enough for me. I would not want the headaches and grief that comes with being a landlord, I don't care how much I would make. Just not worth it to me.
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Old 08-28-2021, 10:20 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
8,701 posts, read 6,161,225 times
Reputation: 12784
Quote:
Originally Posted by Basiliximab View Post
Yes, actually (though I'm quite sure this has been commented on already, just don't have time to read through the thread). I would never be a landlord for a regular long-term rental. I have heard enough horror stories. A vacation rental, I hope to one day; you just have a different clientele, generally.

Though I'm not a house flipper (yet--maybe one day, I would love to!) I enjoy fixing up a out-dated looking house. It is like a hobby to me. I may not make as much, but while I'm doing remodeling and fixing up things, I'm enjoying what I'm doing. So it's just not all about the money. It's nice to make a good amount in selling your house for more than what you bought it for; that is enough for me. I would not want the headaches and grief that comes with being a landlord, I don't care how much I would make. Just not worth it to me.
Since you hate being a landlord, vacation rentals may not be suitable for you. I’ve owned both and I can say the vacation rentals were way more work than regular long term rentals.
I currently own 23 rentals and live a very comfortable life off the income. I spent about 1.5 hours a month on them. Some people whose horror stories you believe in aren’t doing it right.
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Old 08-28-2021, 11:54 AM
 
Location: Gettysburg, PA
2,289 posts, read 2,148,733 times
Reputation: 5093
Quote:
Originally Posted by aslowdodge View Post
Since you hate being a landlord, vacation rentals may not be suitable for you. I’ve owned both and I can say the vacation rentals were way more work than regular long term rentals.
I currently own 23 rentals and live a very comfortable life off the income. I spent about 1.5 hours a month on them. Some people whose horror stories you believe in aren’t doing it right.
What kind of work? My issue is with horrible tenants that ruin the house, will not either pay their rent or vacate the property at the appropriate time. Outside of ruining the property, I don't see how the other issues apply to a vacation rental. And if I get too many tenants who cause major destruction to the property, then I can give up the idea and move on. Yet unfortunately though there are many good rental tenants, I myself having been one for a number of years, the stereotype is unfortunately negative for these people whether that is fair or not. Vacation rental tenants generally come from a higher class background and typically do not have the negative stereotype that renters do. That understanding coming from how that you typically don't rent out vacation homes if you're living paycheck to paycheck. But I obviously have no experience in this type of work and always appreciate people who have sharing their experiences with me.
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