Flip or Rental, how to decide?

[Trent Davis]

When looking at a property what is the best way to determine whether to make it a rental or a flip?

[Brian Cauldwell]

Hi @Trent Davis!

I would consider the following. 

Market rent of the area, and what you could rent the property out for once you have rehabbed the property. Along with that, what will be the monthly expenses if you decided to keep it as a rental. Mortgage, tax, insurance, HOA, etc.

If the cash flow looks nice, then consider what your next step is and what you will need to get there. If you sell the property, you will have more money in your pocket, thus funding your next project. If you do a cash out refinance, does that give you enough money to fund the next project as well. 

If you already have the money for your next project, what is more important to you. Keeping as much cash on hand for a safety net, or having the funds available to do multiple projects, or start working on your rental portfolio. 

[Jose Jacob]

Quote from @Trent Davis:

When looking at a property what is the best way to determine whether to make it a rental or a flip

Rental and flip is two different wing of RE investing. Some people like to rent for long term wealth and some want immediate cash. Some investors do a BRRRR. It all depends what type of investor you want to be.

If you are buying a property market ready to rent, just do the numbers and apply 1% rule

If you are buying a property with lot of repairs, do the numbers' and do a flip if it is profitable and if you need immediate cash.

If you buying a property need some repairs and you can fix it and rent it and do a BRRRR on it later on

Good luck