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4_Dangers_In_Flipping_Real_Estate

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					Title:
4 Dangers In Flipping Real Estate

Word Count:
338

Summary:
If you have recently purchased some real estate for investment purposes,
you are in good company. Recent reports suggest that as many as 25% of
these purchases are made by those who plan on using the property for
investment purposes only. If you hope to "flip" the property there are 4
things you must be aware of that can put a crimp on your profits.


Keywords:
real estate investments, property taxes, renovations, tenants, landlords,
flipping, appraisals


Article Body:
If you have recently purchased some real estate for investment purposes,
you are in good company. Recent reports suggest that as many as 25% of
these purchases are made by those who plan on using the property for
investment purposes only. If you hope to "flip" the property there are 4
things you must be aware of that can put a crimp on your profits.

<b>1. Property Taxes.</b> Keep the property for a few years and you may
experience a surge in property taxes especially if your taxes are
reevaluated during that time. Some hot real estate markets have seen
taxes nearly double in just 5 or 6 years.

<b>2. Renovation Expenses.</b> You may have purchased a "fixer   upper" at
a bargain rate. Once your project is complete will you be able   to recover
the expenses and make a profit especially if the value of your   renovated
property is above those in your neighborhood? In addition, can   you
withstand a correction in real estate values?

<b>3. Insurance and Mortgage Costs.</b> You will pay more for homeowners
insurance if you do not occupy the residence and you have tenants. If you
are financing the property you know that your mortgage rate is higher as
well.

<b>4. Rental Pressures.</b> A market saturated with rentals will mean
that the rents you can charge will be less than what you had hoped to
receive. In some markets you are required to get special licensing in
order to be a landlord. In other markets the legal rights of tenants mean
you could have a lengthy and expensive battle in ridding yourself of a
bad tenant. Will the lower income levels coupled with the added expenses
drag your investment down?

Of course, you can limit your risks [and costs] by doing the majority of
the upgrades yourself, appealing excessive property tax increases, and
finding for yourself a trusted and dependable tenant. It isn't easy
flipping a home, but with a lot of pluck and determination it can result
in strong profits for you.

				
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