The Pros And Cons Of Wholesale Real Estate Investing
Whether you’re an experienced real estate investor or just considering investing in your first property, real estate wholesaling can provide the best option for speed and profit. Investors should start by examining the pros and cons of wholesale real estate investing.
One advantage of wholesale real estate is it allows you to take a cautious first step into the real estate industry by buying discounted houses at an entry-level investment. This is beneficial for those with limited cash or credit. You also learn about real estate marketing, contracts, negotiating, and other key skills, plus the process involved in selling your first wholesale property.
Because you don’t purchase the home, wholesaling is less riskier than other real estate investing such as house-flipping, which requires investing in renovation and repairs, possibly carrying mortgage, property tax, or insurance expenses.
Real estate wholesaling does take significant time and work. With wholesaling, you must create and maintain a list of potential buyers and find a buyer for each property as efficiently as possible. There is a lot of sweat-equity involved with networking, researching, and list management. If you’re looking for a turnkey investment with little effort, working with a wholesaler may not be a good fit.
The final and most timely reason to explore real estate wholesaling is the expected growth of the housing market in 2022, especially in Indianapolis. Realtor.com recently ranked Indianapolis as the 4th Top Housing Market in the United States. According to the Realtor.com rankings, “Indianapolis has a small town feel despite being the 15th largest U.S. city. [It] has an 8% lower cost of living than the national average, low taxes, as well as the ability to get anywhere in the city within an hour.”