Should you rent it out or flip?

With renovations and/or appreciation to the building you may be able to refinance your investment and take a large portion of income out of the property. Since the building is paying for itself, you might be in a situation to raise the mortgage payments to extract a large sum of money out of the building to buy another one. Talk to your banker or a mortgage broker for more information.

Planning on retiring? You now own real estate as part of your investment portfolio. How many people can say that with a couple of buildings under their belt, they now have $XX.xx monthly cashflow?

Flipping
Flipping real estate should be done with extra care. You must really know the market comparables or work with a real estate agent. When you find a property that interest you, you have to decide then how much you could get for it if you put it back on the market, minus all your expenses to figure out your profit. These are some of the expenses to consider:

• All your buying costs: Purchase price, welcome tax, notary and adjustments.
• Renovation costs. If you are new at this and plan on doing the renovations yourself, be sure you have a check list and know the prices of material and labour time.
• Realtor costs to resell
• Cost to breaking a mortgage if you have one.
• Paying the expenses (electricity, etc.) and mortgage while you are in possession
  Insurance

I’m in a situation right now where I’ve got a friend who wants to flip properties. It’s a tough job to sit down and go through the list of every little detail. The main costs are pretty straight forward: purchase price, mortgage payments, closing costs, insurance etc., what is the hard part is knowing ahead of time the renovation time and cost. If you go over your budget it could make or break the whole profit margin.