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2. Renovation Expenses. You may have purchased a "fixer upper" at a bargain rate. Once your project is complete will you be able to recover the expenses and make a profit especially if the value of your renovated property is above those in your neighborhood? In addition, can you withstand a correction in real estate values?
3. Insurance and Mortgage Costs. You will pay more for homeowners insurance if you do not occupy the residence and you have tenants. If you are financing the property you know that your mortgage rate is higher as well.
4. Rental Pressures. A market saturated with rentals will mean that the rents you can charge will be less than what you had hoped to receive. In some markets you are required to get special licensing in order to be a landlord. In other markets the legal rights of tenants mean you could have a lengthy and expensive battle in ridding yourself of a bad tenant. Will the lower income levels coupled with the added expenses drag your investment down?
Of course, you can limit your risks [and costs] by doing the majority of the upgrades yourself, appealing excessive property tax increases, and finding for yourself a trusted and dependable tenant. It isn't easy flipping a home, but with a lot of pluck and determination it can result in strong profits for you.
Copyright 2005 -- Matthew Keegan is the owner of a successful article
writing, web design, and marketing business based in North Carolina, USA. He
manages several sites including the
Corporate Flight
Attendant Community and the
Aviation
Employment Board. Please visit
The Article Writer
to review selections from his portfolio.
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