When considering investing in real estate, there are many aspects that the person needs to consider. First, do they want to be a landlord and possibly own the property for many years? Or would they rather make a quick profit by buying a house, doing a few renovations and then putting the house back on the market? These questions will determine what exactly route the person needs to take, however there are other aspects to consider before answering these questions.
For starters, do you have the money to buy a house from the get go? Though, this may not seem important, it mostly certainly is. Those who have the funds to buy a house outright, usually find it better to buy a cheaper house and use the remaining money to fix the house up. In addition, having the funds from the beginning means that you do not have to take out a mortgage and you will immediately see profits from your investment.
Secondly, do you know how to make home improvements or will you have to pay someone for their service? Those who have a knowledge of home repair are equally profitable in both types of investing, whether short or long-term. If you know how to make the improvements yourself, you can save yourself a little money and make the improvements yourself. For those looking at a long-term investment, being able to do some minor repair work yourself keeps more money in your pocket. Many times those who decide to flip a house find themselves in a hole after paying a professional for a renovation or repair.
For those looking at long-term investment, they not only need to consider the buying of the house, whether they use a mortgage or not, but they also need to consider that they will have to insurance on the house to protect themselves as well as the tenants. Those who decide short-term is more of a fit, only have to have insurance on the house while they own it. Which means that they are out less money.
Whether deciding to invest long-term or short-term, both decisions need to take into consideration the housing market and the location of the house. In either scenario, the investor needs to find a house that will appeal to someone else. A house located in a bad area will not sell or rent in a speedy manner. In addition, investors need to consider the condition of the house and what will need to be done in order to make it livable and attractive. No one wants to invest their time or money into a house that will become a money pit.