Should I flip it or lease it????

[Chris Adams]

I posted about a month back that I have a house I am flipping. I had multiple offers and asked for highest and best. One of the buyers walked away, and the other still didn't have a strong enough offer when he came back. So I listed the property for rent. Mostly to test the market since this is a new area, but I am willing to rent it out.

I have had more interest than expected from the rental marketing, and I have 1 person very serious about renting it.

I threw the property up at a higher rent then I would normally ask, again testing the market and not overly concerned if I actually rented it.

So now my realtor called me back saying there is a very strong offer coming in buy a buyer, and I have a very serious renter interested.

Here are the cash flow details

If I sell the property, I will net $17.5k on a sale price of $102k with me paying $3k towards their closing cost.

If I rent the property @ $950 I will have a monthly cash flow of $380, and I will leave $5k of my own money in the deal when I get the property mortgaged (I have no mtg at this time)

So this got me thinking, what kind of metrics can we use to measure if a property is better to buy and hold vs. flip ?

My thoughts are;

The flip is taxed as regular income, which means Im going to net about $12k

As a rental property, I will be making $4.5k/year, with depreciation I will regain my $12k in profit in just under 3 years.

Plus my profit from debt reduction, and then I still own the property which gives me an opportunity to realize possible appreciation.

I am typically a buy and hold investor but this house was a planned flip.

I would love to hear your thoughts