Are You A Long-Term or Short-Term Real Estate Investor
When investing in real estate, you are faced with two options. You can purchase real estate for a long-term investment, in which you purchase the real estate with the intention of renting, or you can make a real estate investment in the short term, in which you purchase the property, fix it up, and sell it at a higher value.
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Your return on a short-term real estate investment will tend to be faster and quite a bit higher, but short-term investment involves more risk as well. To decide whether you want to invest for the long or short term, consider the following.
A short-term real estate investment strategy is great for properties in areas with stable or insignificant projected increases in value. In addition, if you know professionals willing to work on and improve your real estate for a fair price, if you are able to devote substantial amounts of time to the real estate's development, and if you can afford to pay considerable capital gains at tax time, then short-term real estate investing might be for you.
In contrast, if you can expect a decent long-term appreciation from your real estate, if the idea of working with renters doesn't put you off, if you cannot afford a large-scale refurbishment of your real estate, and if a tax break would be beneficial, then investing in real estate for the long term would probably suit you better.
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