Caring for a piece of real estate in the Twin Cities

Buying your first house or home in MN can seem like a complex subject, but that's only since there are so many choices to make. As an investor, you have a virtually unlimited infinite number of ways to earn money. But that means that you must have the ability to choose wisely. You must choose the extent to which you'll educate yourself regarding each aspect of property investing, whom to add to your team, where to find properties, whether or not a particular property is the right one for you—and on and on.

One decision you'll inevitably face is what to do with a piece of property after you've bought it. You may not be the type of real estate investor who wants to purchase a piece of property and hold on to it for an extended period of time. You may not want to have to grapple with tenants and property managers or the upkeep of a property. If these things do not appeal to you in the slightest, your other option is flipping.

Flipping a piece of MN real estate is simply selling it immediately after you purchase, perhaps even at the same closing. At the very latest, flippers tend to start the selling process the day of the closing. Some flippers even begin the process before they own the property, although this is risky business. However one chooses to approach the process, flipping inevitably entails a mad rush to the auction block, because a vacant piece of property is always a liability.

On the other hand, when you hold Minnesota investment property, you get the opportunity to increase its value. If you get a really great deal, the price you paid for the property will likely represent only a tiny fraction of what you can potentially make from it, and when you do decide to go ahead and sell it, you'll be able to do so at your leisure and get a higher price than you would've by flipping.

This holds true particularly if your property is a multifamily residence such as a high rise apartment. If it is a good property in the right area, and you take care of it, chances are that occupancy is going to stay high. With a piece of property like that, your earnings tend to increase exponentially. If you manage your property well, this is virtually assured.

Speaking of property management, you'll have to decide whether you will do that yourself or hire a company to do that for you. If you are the owner of a particularly sizable property, or if you have many properties, you will probably have to employ a manager. Ken McElroy, author of The ABCs of Real Estate Investing, suggests that you employ a property management company so your time and effort will be put to better use elsewhere.

This is what you will have to consider as a first time minnesota home owner.

Ultimately, however, whether you decide to flip a piece of property or hold on to it depends mainly on how you'd prefer to spend your time. Perhaps you would enjoy the fast-paced workday that flipping entails. Perhaps the adrenaline rush sounds like an adventure to you. In that case, you should educate yourself on the proper way to flip properties (which is to wait till you actually own a property to arrange a sale and not to approach buyers at the very closing at which you purchased a property).

However, if the concept of caring for a piece of real estate in the Twin Cities sounds appealing to you, then purchasing and holding may be right for you. Depending on your particular talents, you personally may find it more profitable to work one way as opposed to another. It's totally up to you.

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