So, you have found a great real estate deal and now have it under contract. First, congratulations! You've taken action were many have not.

Now you're faced with the decision of whether to keep the property as a long-term rental, or sell it for quick profit. There are a couple things to consider when making this decision.

The first thing to consider is the financing for the purchase and any repairs that are new on the property. Are you able to buy the property in such a way that you can finance the repair costs?

For example, are you able to buy the property with a hard money loan where you can pull out the repair cost with the hard money loan and then refinance the property once the repairs are done to keep it as a long term rental?

Unless you have tons of cash sitting in low yielding savings accounts and want to leave the cash in the rental property then you'll want to find a way to complete the repairs without leaving the cash in.

This is true only if the property will produce a positive cash flow with you pulling the repair money out.

Which brings us to the next thing we need to consider: cash flow.

If the property is going to have a significant negative cash flow each month, you may want to consider selling it, taking your profit and moving on to a new property.

We use two very separate calculations for buying houses to keep as rentals (net operating income) and for flipping houses.

So, once you have run your numbers for holding the property as a rental, if the numbers indicate that you have a break-even cash flow or better and the property is a good candidate for long term buy and hold, then consider keeping it as a rental asset in your portfolio.