There are typically 3 property investor models for investment in property.
1. Buy to Rent (Buy and Hold)
This model is the traditional investment method of old where the investor becomes a professional landlord—with the core business being the acquisition of property and the management of tenants.
Inherent risks of this model are the cost of vacancy (unlet units), ongoing maintenance, and handling of tenants within the ever changing laws and regulations
2. Buy to Sell (Fixer up or Flipping)
The riskiest of models in which the odds are against the investor from the outset, and a model that many regard as gambling.
In this model any delay in reselling the unit, unexpected costs in renovation and improvement, or over estimation of selling price (value) will erode the projected profit and possibly even the investors capital.
3. Income For Life (Rent 2 Own)
This is a simple, practical plan that eliminates most of the risk of managing tenants, removes the risks of ‘flipping’ and allows the investor to turn nice family homes (no fixing up ‘TLC’ homes) into 24 homes by having homes buy homes.
For more detail on this, get the report by calling one of our agents.
Tags: buy, fixer, flip, gambling, hold, investment, landlord, model, own, property, rent, sell, tenants
March 27th, 2008 at 2:05 pm
This post provide total information about models in property investments. I understood from this post rent to own model is safest in real estate business. Thank you for your information..
October 11th, 2009 at 3:38 pm
[...] at the nearest casino (and have more fun spending it.) A speculator will look at returns, consider rental and resale options, and make a decision – a speculative decision usually based on very little [...]
February 5th, 2010 at 7:48 am
Here is a link to a more recent article describing the same topic – http://realestateweb.co.za/realestateweb/view/realestateweb/en/page206?oid=55138&sn=Detail