As a Detroit real estate investor, you’ll need to determine if a property should be held or resold. While some are great long-term, others are not. In our latest post, we will take a look at some signs to help you determine if you should hold or flip your Detroit investment property.
Let’s say you just bought a property at a great price, but now what? Whether you decide to hold the property, renting it out as an additional form of income, or you buy, repair and flip, you’ll need to know what you’re getting into. Accurately estimating costs, padding your budget, and buying within your means will get you started, but you’ll need to learn how to play your cards. Below we will look at some signs you should hold and some signs you should flip your real estate investment in Detroit.
Signs You Should Hold It
Steadily Rising Markets
Take a look at what real estate has done over time in your neighborhood. Even with some sudden drops in values, if the overall price is continuously climbing, it might be best to hold, at least for a bit, to see what transpires. A market that is consistently rising, can help you to see some great profits over the long-term.
Renters will basically be paying your mortgage while you build all the equity. If you aren’t losing money, and the potential is there to make more down the road, holding it may likely be your best option. There is a chance the house may be vacant in the future or that you won’t be able to sell it down the road. Take advantage and earn as much extra income from the property while you can!
When you have high-quality, long-term renters in place, who are covering your costs of ownership, you’re not going to want to mess up a good thing. When you have long-term tenants in the house, the only reason you would likely want to sell would be to fund a new investment. Before selling a property with renters in place, make sure that what you decide to do with the money instead will be just as profitable. Great tenants can be hard to come by, so when you have them in your Detroit investment property, it can be best to hold on!
Signs You Should Flip It
If you ever get the chance to sell an investment property for a huge profit, it’s definitely worth looking into. Take a look at why the sudden rise in value. Should you hold out for even longer or sell to be safe? If you decide to keep the property, you won’t have any guarantee you will be able to receive as much if you opt to sell in the future.
High Ownership Costs
If your ownership costs are rapidly rising, it might be time to put your money into another investment. Sure, some of your ownership costs can be offset by raising the rent, there are limitations on how much you can charge and how quickly the changes can go into place. If high taxes, maintenance, never-ending repairs, and high vacancy rates are costing you, it might be time for a flip. You should always make sure you will be able to consistently be able to generate enough income from the property to cover any holding costs associated with it.