Considering real estate investment options in Birmingham? Wondering whether to flip properties or hold them as rentals? In this friendly guide from Merry Homes, we’ll explore the 4 advantages of flipping over holding in Birmingham that could help you make your decision…
Looking to break into real estate investing? You’re likely weighing several strategies – wholesaling, renting, or flipping properties. As experienced local buyers who’ve seen hundreds of successful transactions over our decade in business, we’ve gathered valuable insights. If you’re considering property flipping in Alabama, here are 4 key advantages of flipping over holding properties in Birmingham…
Flipping Over Holding — Advantage #1
The first advantage of flipping over holding is the quick turnover of income. With our family’s experience in the Birmingham market, we’ve seen investors purchase a property on the first of the month, complete strategic improvements over the following weeks, and then sell for a profit within just a couple of months – sometimes even faster.
This rapid timeline offers a significant advantage because you avoid the ongoing headaches that come with long-term property ownership (like maintenance issues and unexpected repairs). Plus, you enjoy the benefit of generating consistent income and seeing a complete return on your investment within weeks instead of waiting years for rental properties to pay off.
Flipping Over Holding — Advantage #2
The second advantage to flipping over holding is that you don’t have to deal with tenants. As buyers who work with many tired landlords in the Birmingham area, we’ve heard countless stories about tenant challenges. Investors who buy and hold typically rent to tenants who sometimes don’t pay on time, damage property, or even abandon units without notice.
With flipping, you’re only managing materials and renovation work – wood, nails, and drywall. These are elements you can control directly, without worrying about whether a tenant will respect your property or honor their rental agreement. It’s a more predictable process with fewer people-related variables.
Flipping Over Holding — Advantage #3
One of our favorite reasons for preferring flipping over holding is your ability to influence the selling price (and therefore your return). With rental properties, you’re constrained by what the local market will bear. You simply can’t charge more than what tenants in Birmingham are willing to pay, and there’s a definite ceiling to rental rates in most neighborhoods.
But with flipping, each improvement directly impacts your potential profit. You can remove walls for an open concept, update paint colors, enhance curb appeal with landscaping, or add modern fixtures – all strategic moves that increase property value. The beauty is that the more thoughtful improvements you make, the more you can typically boost the final selling price and your return on investment.
Flipping Over Holding — Advantage #4
Another compelling reason many investors prefer flips over rental holding is the large pop of income. A rental property typically provides only a few hundred dollars of monthly cash flow. While you may eventually recoup your investment, you’re limited to that small trickle of income month after month, which can feel painfully slow.
With flipping (when you’ve purchased strategically and improved thoughtfully), you can generate thousands of dollars at once when you sell. That substantial income boost gives you greater financial flexibility and the capital to move quickly on your next investment opportunity in the Birmingham market!
Summary
If you’re weighing whether to flip or hold investment properties, both strategies have their place in a diversified real estate portfolio. However, these 4 advantages of flipping over holding in Birmingham offer compelling reasons to consider flipping as a viable strategy, especially if you value quick returns and less complicated property management. As a family-owned business with deep roots in Birmingham, we’re happy to share our decade of local real estate experience with fellow investors.