For those that have made the decision to buy a piece of beautiful Sarasota FL real estate as an investment, the number of options are staggering. You can buy a commercial piece of property, you can buy into a condo development or maybe an upscale apartment building. Most people, however, choose to buy a home to fix up and then sell. Thanks to the popularity of the "flip" shows on cable, the whole process has been pretty well mapped out for most people, and although those shows are sure to show how hard the work is, they also show the profit the investors made.

But do you have to buy a run down looking home to make money off of real estate investment? Some folks choose instead to buy a new home and let it appreciate in value for a few years and then sell it instead of buying a new home and fixing it up. There are pros and cons to both choices, so let´s take a look at the benefits and negatives to each approach.

If there is one thing that Sarasota has, it´s planned communities. And thanks to the lack of serious overcrowding problem that has troubled so many other cites in Florida and around the nation, there are new housing communities going up all the time. Some investors have decided that the smart thing to do is to buy into one of these un-built communities, wait for the home to gain in value and then sell it as a never-before-lived-in home for even more than they bought it for.

This approach can pay off, but there are many factors that are playing on your profit margin that you have little to no control over, and that idea scares off many from this route.

You can never tell what is going to happen to a particular housing community. There is no blue print out there to predict whether a community in five years will be considered a "nice place to live," an "upscale place to live," or a "glorified slum." You can get sweet-talked by a new home community sales rep who promises you that there will be record appreciation on these homes and that only millionaires will live there, but it´s all speculation. If he´s right, paying for 5 years of mortgage payment, property tax and other home fees would be worth it since there would be equity built up by then and the reputation of the community would make it a very desirable place to live. But that knife cuts both ways and if the wrong demographic moves into that community, you can only sit there and watch your home decrease and decrease and decrease in value from what you paid for it. This is why no investment, not even real estate, is a guaranteed 100% sure thing.

On the other hand, if you buy a property that is already in an established area for the purpose of "flipping" it, the reputation of that area is already known so you know exactly what you´re getting yourself into before you buy. Sure, areas become fashionable and undesirable all the time, things are always changing, but in the time it takes you to flip a home, one area shouldn´t change that much. Most home flips take about a year from the time the home is bought, fixed up and resold. There are still many, many x-factors that go into flipping a home, however. You could buy the home and start renovations only to find out that there are many more problems then you thought. You can get stuck with a contractor who isn´t honest or doesn´t have a good work ethic. You can fix up the home beautifully and then not be able to resell it because the local market has gone cold. It´s all a big gamble, but you can minimize the risk by learning as much as possible before you start.

Choosing which kind of real estate investment is for you can be a tough decision. There are pitfalls either way and you have to know what you´re doing or you can lose your shirt. But with proper planning and a lot of elbow grease, you can make some serious cash no matter which method you choose. GBrey