What to do With Residential Properties | Fix & Flip Properties
                     Fix and 
Flip
Buvys .
and  
Hold
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There’s more than one way to invest in real estate, and 
 it often comes down to a choice between the ‘fix and  
flip’ or the ‘buy and hold’ strategies. Each strategy  
comes with its own pros and cons, so if you’re  
considering both investment options, here is a quick  
guide to help you decide.
Fix and 
Flip
Recalling our ‘Ultimate House Flipping Cheat Sheet for
 Beginners’ article, this strategy involves purchasing a  
property, making improvements, marketing it, and then  
selling it for profit. Flipping houses or commercial  
spaces requires a lot of effort within the shortest amount 
 of time possible. This allows for a faster ROI, freeing up 
 investors’ capital for their next money-making project.
Finding the right property 
to  renovate and sell
The key to maximizing profits here is to find properties
lower than the market price, like foreclosed homes, and 
 giving it a reasonably financed makeover. CNBC  
reports that inexperienced flippers tend to put too much 
 money into renovations. As a result, these expenses  
quickly add up and investors might find that their net  
profit is not significant enough for the work put into the  
flip.
But when financed and managed properly, fix and flip  
properties can promise instant gains — minus the  
holding and transactional costs of the buy and hold  
strategy. When it comes to the choice of residential and 
 commercial property to flip, and Entrepreneur article  
suggests canvassing for fixer-upper properties in the
‘nicest’ neighbourhoods. This means that the property  
should be adjacent to decent schools, have easy  
commute options and routes, and is part of a  
competitive market. The last point is especially true for  
flipping commercial mortgages properties. Nearby malls 
 and buildings mean a bigger guarantee of faster 
returns  on office and retail spaces.
Buy and 
Hold
Collecting properties is equivalent to amassing wealth.  
The biggest disadvantage of the buy and hold method is 
 that it requires a sizable amount to invest with,  
especially when looking to purchase several properties.  
However, investors can be rewarded with steady  
returns by putting them up for lease, which can  
definitely add up over time.
What to do with residential 
properties
Long-term rental – Apartment Units: Having long-term  
tenants ensures a more consistent income, which  
means that the property will continue paying for itself for 
 the foreseeable future. As a landlord, you won’t have to 
 worry about marketing the space, paying for utilities, or  
doing basic maintenance.
Short-term rental – Vacation Homes: If you own a  
property in a touristy destination, real estate investor  
Sarnen Steinbarth explains that your property offers  
higher income potential as a short-term rental. Luxury
homes, seasonal vacation rentals, and Airbnb units can 
 be very lucrative, but this means that you’d have to  
consistently market to renters. Depending on your  
agreement with the tenant, you’ll most likely be  
shouldering utility and repair costs, as well.
What to do with 
commercial  
Long-term rental p– Rreotapil oer rOtffiieces Space: In a  
competitive market, you’ll be able to rent out your  
commercial property in no time. Do note that  
commercial leases have longer terms than residential  
units, and whether a contract renews automatically or  
not depends on your agreement with your tenant. There 
 might also be significant renovations to be done on the  
property. This is so it suits the business’ branding,  
especially in retail spaces, or the company’s needs, as
in the case with offices.
Short-term rental – Coworking Space: Alternatively, 
 you can also capitalize on the growing number of  
startups and young professionals in your area by  
creating a coworking space. According to a Small
Business Trends post on the rise of coworking, 2,188 
 spaces opened in 2018 worldwide, with half of them
located in the US. The number of remote workers and 
 freelancers continue to rise, which by this year is  
expected to account for 40% of the total workforce.
Many of them are turning to these spaces that offer  
different types of packages that fit their needs. As the 
 investor, you can have a flexible setup, similar to
Industrious and its canvas suites for teams of more than 
 20, private offices for smaller groups, and community  
memberships for entrepreneurs and freelancers just
looking for a dedicated desk or flexible seating. This 
 way, you can rent out multiple flexible spaces 
within  your property to more people at a time.
Short-term rental – Pop-up or Events Place: For  
those who don’t want the hassle of managing this type 
 of business, what you can do is to provide a space for 
 pop-up shops or a rental space for private events. All  
you’ll have to do is provide basic amenities, such as  
bathrooms and lighting, and give free rein to your  
tenants.
Whether you’re dealing with a residential or a  
commercial property, knowing your market is key to  
maximizing your investment. That, and a keen sense of 
 property management are very important. Your  
responsibilities include reporting your rental income to  
the IRS — an important step in getting tax deductions  
that come with owning rental real estate. And of course, 
 knowing how to deal with tenants is essential, too.
The fix and flip strategy is more suited for investors  
working with a smaller capital and looking for quicker 
 returns. This requires realistic expectations and
experience with making renovations that won’t diminish  
profits. If you’re looking for a more long-term and  
steadier investment, you can opt for the buy and hold  
method, provided that they know how to manage people 
 and amenities. With both strategies, understanding the  
market is crucial.
2 6 2 5 E a s t 1 4 S t  . S u  
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c o m   w  w  w  . e x p  r e s s c a p  i t  a l f i n  a n  
c i n  g  . c o m