Tuesday, May 27, 2014

Renting or reselling real estate assets is an old tradition among buyers and landlords for earning profits. Whether being conventional buyer or professional investor, flipping to resell or hold to rent are the traditional ways of earning profits which are being practiced worldwide. Primary difference between the two strategies is the length of time frame required to receive profits. Reselling after flipping is considerably faster way to generate profits whereas renting gives profits in long run. Choosing the right strategy totally depends on market conditions, asset prices and rental rates. Further the ease of earning good money with real estate investments have made it popular alike among local and overseas investors on international levels.

Especially, if you are investing in Dubai property market, you need to identify what is most suitable option and how you can maximize the profits, while reducing cost.

Identify your motive

If market analysis reveals uncertainties in long run or you need quick money, it will be better buying a property to flip and resell quickly to earn profits. Investing money to renovate and repair existing structure surprisingly enable buyers to earn profits in shorter period of time. Rather it is a complicated process as it involves several important things which are difficult to handle, especially for an inexperienced buyers.  On the other hand buying a residential unit to rent will provide you guaranteed income. If you are more interested in buying a property to rent, you will essentially need to consider your primary source of income and available finances. It is better not to depend completely on rental income. Depending on your needs, time and available funds it is better to identify your motives.

Fix and Flip residential properties in Dubai

Choosing the right property to flip is difficult and most crucial step. When buying a house to flip it is better buying an inexpensive property, as you are going to spend significant amount on its renovations and repairs. Buying an expensive house to flip for earning profits is too risky. Repairing can be very expensive and it’s not necessary that reselling will cover the repair expenses while giving profits as well. Applying to get personal loans from bank to invest in property flipping could be very expensive, banks are charging higher fees and interest on issuing short-term loans. Despite possessing funds, renovating and repairing home can also be difficult for many. It is obvious that everyone should prefer buying an inexpensive property to flip.

In most of the cases such properties are not in good condition. And buyers have got to invest money and time to earn profits. However, it is believed that flipping is believed to generate profits quickly; investors should keep the probability to face losses. The losses are expected when investor doesn’t find suitable buyer for longer duration. He has already invested significant amount of money in buying property. In case of buying property to flip, cost of buying property encompasses cost of bank loan interest payments, agent fees and commission, housing fee and property transaction fee. Further the rising prices of residential property in Dubai have made it hard to find a suitable property to flip within your budget. Market observation revealed that there are more listings for sale as compared to rent. Such market conditions clearly depicts that investors should wait for distressed sale.

Rent residential properties in Dubai

Like flipping to resell, renting property in Dubai has its own benefits and drawbacks. Renting will not give you profits immediately, provided that you continue renting that property for 5-7 years. Furthermore, your asset has been appreciated during 7 years and you can even sell it for good money. Longer you keep your rental assets higher will be its value.  Buying property unit with aim to rent in future is not simple buying of assets. Investors need to consider the demand of rental properties in specific neighborhoods.  Prefer buying assets to rent after observing the demand in that neighborhood. Current market analysis showed that rent prices in Dubai are on the rise again making buying to rent profitable option. You can further get useful information about Dubai rent prices to enhance the profits with your investments.

Flipping to resell or hold to rent, depends on several factors including current market conditions, type of property, financial aspects like income you are expecting with them.  It depends on buyers preferences whether he wants to earn good amount of money in short period of time or willing to build equity.

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