Flip Your Next House, or Rent It out With Plano Property Management?

Like a lot of cities in Texas, Plano's real estate market has been booming in recent years. Plano was recently ranked among the top U.S. markets to buy a home, and along with nearby Dallas and Frisco, Plano is one of the big real estate markets to watch in the Lone Star State. 

For those looking to invest, the big question is this: is it better to buy houses in Plano to flip for a quick profit, or invest in rental properties for long-term earnings? If you're leaning toward the latter, it's important to have an expert Plano property management company in your corner. The right property management company in Plano can provide the crucial structure you need when trying to grow your real estate portfolio in Texas!

You've probably seen plenty of house-flipping shows on TV at some point and given it some thought. However, in light of the fact that those shows are heavily staged, it's best to separate fact from fiction when it comes to long-term wealth.

Flipping vs. Renting

Flipping houses and buying rental properties are two very different games, and they each have their unique drawbacks—as well as some significant benefits. Flipping tends to be more attractive to those looking for excitement and a chance to make a quick buck, while rental properties appeal to anyone looking to invest in their long-term financial future. It comes down to the difference between active and passive income.

• Active income: At the end of the day, flipping houses is not an investment in the traditional sense. It's a job, and it earns you money through day-to-day work. Stop working, and you stop making money. This is what is known as active income. 
• Passive income: Buying properties to rent is an investment. It allows you to continue earning money in the form of rent for months or years to come, even if you are not directly involved in the management of those properties. This is what is known as passive income. 

Pros and Cons of Flipping

• Pro: With flipping, you'll see a relatively quick return on your investment in the right market. A successful buy-and-flip scenario puts cash in your pocket quickly, typically within about six months of your initial investment. This means your cash won't be tied up for long periods. 
• Con: Inconsistent income abounds! Flipping houses is an active pursuit, and what you get out of it will be proportional to what you put into it—in terms of both time and money. That means you need to keep actively flipping houses to keep profits rolling in. In some cases, this adds up to sacrifice in the steady consistency of your income.
• Pro: No need to manage the property with a buy-and-flip! When you flip a house, you get to wash your hands of it and walk away. Once the property is out of your hands, you don't have to worry about management tasks like finding tenants, setting the right rent, and ongoing maintenance (of course, these worries also go away if you work with Plano property management.
• Con: Taxes, taxes, and more taxes. Flipping properties comes with some high additional costs, including taxes on capital gains! If you're in the business of flipping houses, you're technically self-employed, and the self-employed pay some of the highest income taxes in America (expect to pay about 15% above your normal taxes). 

Pros and Cons of Renting

• Pro: Long-term income security is what investing in real estate is all about! When you invest in rental property, it allows you to collect long-term income. This is a great way to build wealth, become financially independent, and eventually retire securely with tangible assets for your heirs.
• Con: The risk of vacancy can be a concern if you don't have a savings buffer. Rental properties only make money if they are filled with tenants, so you do run the risk of losing income if you are not able to fill all your units. This is one of the major areas where working with a Plano property management company can help. 
• Pro: Increasing property values mean big value for investors! If you invest in properties wisely, their value should increase over time. By purchasing at the right place and the right time, you get the added assurance that if you ever do decide to sell your property, you will most likely sell it at a higher profit than if you had flipped it quickly. 
• Con: Long-term responsibilities can scare off new investors who aren't expecting the workload. When you own a rental property, you're responsible for its long-term care and upkeep. If this isn't appealing to you, consider hiring a property management company to take on some of the active tasks associated with rental properties, like marketing and maintenance. 

How Plano Property Management Helps You

If you decide to invest in rental properties and continue growing your financial future, it helps to have a top Plano property management company working with you! With all the time and effort that goes into buying properties (and renovating them as necessary), one of the biggest benefits of a property management company is not having to worry about the day-to-day nuts and bolts of management.

At RentHub Property management, we offer services ranging from marketing your property and making sure it's ready to rent, to handling maintenance, collecting rent, and easing tenant-landlord relations. We do it—so you don't have to! This gives you more time to get back to what's important: growing your real estate portfolio!

When you have a gameplan for adding properties, property management makes it easier than ever to integrate them into your portfolio. If you're just getting started in the world of investment property, download your FREE copy of our guide to real estate investing; adding properties smarter means not working harder.

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