If you were to buy a house then sell it, how will you make money?
Really there's 3 ways to make money on a house1) Buy a run down house, and fix it up, and then sell it a higher price, the assumption being the "fixer-upper" was priced low enough that the addition of the repair costs, would result in a home that was worth enough to make a profit on it. Lots of TV shows and books to help you on this one, typically called "flipping a home"2) Buy a house and wait for it to appreciate in value. In some very fast moving markets (like the SF Bay Area), a home may appreciate enough in a six months or a year to make a profit (note also a home can depreciate just as quickly, like during the housing crisis starting in 2008, so there's risk involved here too).3) Find a home for whatever other reason is underpriced, e.g. a for sale by owner for example, someone who doesn't realize where the market currently is for homes like theirs, or just doesn't want the hassle of selling and is looking for a quick deal.But foregoing any of the three above, in a typical scenario where you buy a house and need to sell it within a year (because of a job transfer, etc), typically those people lose money on the deal (and in fact some companies when they move employees will absorb that type of loss for the employee).
Whats the best way to buy and rent out houses for profit?
In the past 4 year I have bought three rentals and make cash off all of them, send me 29.96 and I will tell you how, JUST KIDDING. You have to find a market. I have my homes near a Military Installation. People are there for 2-3 year and then move. Since they are there for a short period of time they don't buy but many want to live off post. Another good market could be in a college town, put you will probably have more damages and take more of a loss from that. If that isn’t an option than you can go after low income. I am looking into that now. First thing is to find if there is a market to support the rentals. Then you have to figure out how to get that market. I am fortunate. I making about a 25% return on my rent vs. my mortgage plus some tax benefits. I have not paid on red cent for any of my rentals, my tenants are paying all the bill and leaving me with a positive cash flow. Just a few signatures here and there. Even if you can’t have the cash flow I do I still think it is a good investment, you just have to look at it as a long term one. Once the home is paid for you will have gained all that equity and probably have paid far less than you would for any other type of investment that will pay out in the same way. Plus there are good tax advantages. It is not for the faint of heart and I have worked many many weekends and evenings getting my homes ready. I also manage my own homes and one I don't own. I have my RE license, inactive now, and taking many property management courses. It is work but I can involve my entire family in it. My homes will be my children’s college fund. One key thing to keep in mind is that you are buying rentals, not your dream home. You want simple homes with simple landscaping. Even the best tenant won't take care of a home like you would. With only 20k to start I don't see how you can make it 20K a year. I came in with about 50K (money I made on selling my home in CA before the market turned). All the money I had invested came from real estate. This is a great time to get into the game if you can. Even if you don't make the $$$ you want I would still suggest looking into it. A wise man once told me a pig gets fed and a hog get slaughtered. Don't be greedy but work hard.
Is buying a house always a good investment?
While property is often a good investment, it has its drawbacks as well, and is not for everyone. Typically, real property appreciates faster than other investments, and depending on the type of property, it can also pay some of its own upkeep and operating expenses. However, it is not a good investment for someone that needs liquidity (the ability to get at the money quickly), or who intends to make a quick profit, as the real estate market fluctuates, and there are times (now, for example) when properties may take much longer to sell, and may actually drop in value for a time. Buying your home is probably the best property investment, as you will need to spend money to get a place to live anyway, but even here, there are exceptions. If you do not have definite plans to stay in one area for a period of at least a few years, the costs involved in buying and selling real estate can easily offset any profit. Additionally, first time home buyers often find themselves unprepared for the problems of home ownership. In general, however, most people find that the benefits of home ownership far outweigh the problems. Choose carefully, have inspections done and don't buy more home than you can afford, and you'll find that owning your home is far better than renting.
Is it easy to get financing to flip a home?
When I became a realtor 9 years ago in class we were told that our state is illegal and our does not allow flipping properties because it raises the cost of homes/apartments/duplexes too high and then people can't afford to buy them here, and here is a tourist area. Seems that law has gone by the wayside because properties here have increased by twice or more in the past five years, and the problem to keep people here is starting. Nine years ago I was looking at condos for $65,000 here. If you intend to buy the condo maybe you might want to do that city a bit of good and rent it out to teachers or people in other industries like firefighting or police who can't afford otherwise to rent or lease and still work. It takes a while to sell a house now that everyone has increased the prices of homes, and just to sell their homes people are starting to have to decrease the price (maybe that's why your landlord has dropped the price). The investment is yours to predict. If the bubble bursts you might be stuck with it and have to resort to renting it out if you decide to leave.