Can you make any money doing flips? It is possible...but not easy! Unless you buy a place for nothing, do most (or all!) of the work yourself, be in a good market, and are in an "up" market cycle, it may not turn out the way you want. If you do manage to make any profit, the taxman may take any profit you make, taxing it as "business income" (100% taxable), rather than as a "capital gain" (50% taxable). A much better strategy is to buy and hold a rental unit. You can still make quick money - buying fix-up places, putting in your "sweat equity", and refinancing. The difference is the money you make when you refinance is TAX FREE! Not only that, but you now own a cash flowing asset. You can take full advantage of appreciation, mortgage pay down, and tax write offs.
At best, flipping can give you a wage. Buying cash-flow rentals generate wealth!
No comments:
Post a Comment