Flip or rent? It's a difficult question to answer. Both have some really great assets and both have some particular drawbacks. As investments go, both are excellent ways to build wealth. The main difference is whether or not you choose to go for the quick cash of a flip or building equity through longer-term ownership.

Lets investigate the flip first. The idea here is to purchase a home in need of a bit of work at a nice low price. Once you close on the home, make a list of the necessary improvements and get to work. Ideally the changes will be only cosmetic and intricate alteration of the home's structure or workings will not be needed. Good candidates for change are things like the paint, fixtures, appliances and other easily changeable things. Try putting down new floors for an added touch or refinishing existing hardwood if it possible. Another great idea is new cabinets for both bathroom and kitchen. The pros of the flip are fairly simple, it's all about the bottom line profit when the home sells. However, keep in mind that the profit will be taxed as normal income. Also be mindful that the home may not sell right away. You should investigate local real estate trends first and make sure that your property is as competitive as possible.

Renting is an entirely different ball of wax. Purchasing a property for renters is going to be quite the opposite from flipping. You do not need a property that will be attractive to buyers, rather a home with the necessary appliances and utilities that is well priced and clean. Keeping a property like this has some nice assets like long-term appreciation of the property and a monthly income. However, you must be ready to be a landlord, and be willing to wait until you have the RIGHT tenants. Also be prepared that you may occasionally have to kick someone out, be strict when it comes to rent collection and any number of other tasks a landlord is responsible for. The choice is your, but remember to be planned and ready for any eventualities that occur with either investment.