Tanya Rankin video blogs about the misconception of of flipping homes and reminds you how easy it is to forget some of the details!
Tanya Rankin: Hi it’s Tanya Rankin in Williams Lake. I want to talk about the concept of flipping homes and making sure that you consider all of the expenses before you get in over your head. I know a lot of people see these programs on HGTV and it looks so... I think it makes it look very glamorous and quite an easy way to generate a large profit or return on your investment. But there’s a couple things that people need to consider and one of them is often unless you're catching the market on a bit of an upswing, it’s very very difficult to make that return on your investment that they’re showing on television. The other thing people need to consider is the capital gains tax as part of their expenses when running their numbers. It’s something that time and time again my clients that come to see me about this idea have often completely overlooked. They don’t realize that you’re going to have to pay that capital gains tax on the profit that you made from the purchase price to the sale price. Once you run that number you often find that the return on investment just isn’t quite what you thought it would be. I’m not saying that it’s not a great way to get into the real estate market and start generating that equity that you want to build up but often unless the market is on a climb your better to buy the property and fix it up and generate that rental revenue for a period of time that’s going to allow the market to also increase in value. If you have any questions send me an email to firstname.lastname@example.org anytime and I hope you have a fantastic week.