BRRR, is an investment strategy that involves buying a property, refurbishing it, renting it out, and then refinancing the property to extract equity. The extracted equity can then be used to purchase additional properties, creating a cycle of investing in properties.
Pros:
Potential for significant profits: BRRR can be a lucrative investment strategy, as investors can extract equity from refinanced properties and use it to purchase additional properties.
Increased property value: Refurbishing a property can increase its value, which can lead to higher rental income and a higher resale value.
Cons:
High upfront costs: BRRR requires a significant upfront investment, including the cost of the property, refurbishment expenses, and the cost of refinancing.
Risk of cost overruns: Refurbishing can be unpredictable, and it’s possible to incur unexpected costs that can impact the profitability of the investment.
Responsibility as a landlord: As a BRRR investor, you are responsible for maintaining the property and dealing with tenants, which can be time-consuming and may require a significant amount of effort.
Market volatility: The property markets can be volatile, and rental income can be impacted by economic conditions, changes in local rental laws, and other factors.
BRRR is a complex investment strategy that requires careful research and planning.