DIFFERENCE BETWEEN FLIPPING AND REAL ESTATE TRADING IN THE CANARY ISLANDS
REAL ESTATE TRADING VS. REAL ESTATE FLIPPING
If you are passionate about real estate and are trying to approach the world of real estate investment, it is important to know the different strategies available.
Two of the most popular are “Real Estate Trading” and “Real Estate Flipping,” both of which aim to generate profits through real estate transactions.
In this article we will explore the key differences between these two strategies, helping you understand which one might be best for you.
1ST DEFINITION.
REAL ESTATE TRADING
Real estate trading, also known as “house flipping,” involves buying a property at a discounted price, renovating or improving it, and then selling it at a higher price within a short period, usually a few months.
The goal is to take advantage of rapid increases in value and make a significant profit from the sale.
FLIPPING REAL ESTATE
Il Flipping Real Estate is a strategy similar to real estate trading, but with one key difference.
Instead of selling the newly renovated property, the investor keeps the property and rents it out to generate long-term cash flows.
In addition, Real Estate Flipping often involves a greater emphasis on improving the property and creating a high-quality end product to attract high-ranking tenants and maximize returns.
2ND INVESTMENT PERIOD
REAL ESTATE TRADING
This strategy involves a relatively short investment period, usually a few months to a year.
Investors seek to sell the property quickly once renovations are completed to maximize short-term profits.
FLIPPING REAL ESTATE
Flipping Real Estate involves a longer investment period.
Investors aim to generate long-term cash flows by renting out the renovated property, which means they keep the property for a longer period, often from a few years to many years.
3RD RISK AND RETURNS
REAL ESTATE TRADING
Real estate trading can offer high profits in a relatively short period of time, but it also carries higher risks.
If the real estate market experiences a downturn or renovation costs exceed forecasts, the investor could incur significant losses.
FLIPPING REAL ESTATE
Real Estate Flipping, while offering a stable long-term return through renting, may not generate as high an initial profit as real estate trading.
However, it also reduces short-term risk, as the investor has the opportunity to earn monthly cash flows from the property through rentals .
4º FINANCIAL CAPABILITIES AND SKILLS
REAL ESTATE TRADING
This strategy requires significant upfront capital to quickly acquire and renovate the property.
In addition, the investor should have a good understanding of the local real estate market and project management skills to complete renovations efficiently.
FLIPPING REAL ESTATE
Anflipping Real Estate also requires an initial investment to purchase the property and finance improvements.
However, as the property is rented, the investor should also have property management skills to maintain the property, manage tenants, and address any maintenance issues.
In conclusion, Real Estate Trading and Real Estate Flipping are two different strategies, both with advantages and challenges.
The choice between the two will depend on your financial goals, your financial readiness, your skills, and your risk appetite.
Before embarking on any real estate investment, it is essential to do thorough research, consult with industry professionals, and carefully consider which strategy best suits your financial needs and aspirations.
If you are interested in applying either of these two real estate investment strategies on the island of Gran Canaria, I will be happy to join you by providing all my knowledge and experience gained from years of working in the local real estate industry.
You will also be able to join my method “The Real Estate Investors Circle” focused on the Short or Medium Term Rental Business resulting from a real estate investment with one of the two strategies of Flipping or Real Estate Trading.
Please do not hesitate to contact me at my contact details to evaluate together the best way forward to make your real estate investment in Gran Canaria safe, profitable and guaranteed.