Flipping houses can be a solid way to generate income, but keep in mind that the earnings are often inconsistent. House flipping is a high-risk venture with great potential, though there are many obstacles to overcome. Investors may be waiting for months, sometimes even years, before they see earnings from one house flip.
To lower these risks and establish a more reliable income, you could add one or two rental properties to complement your flips. Rental properties are among the most stable investments, offering long-term growth that is hard to match with stocks or other retirement products.
Is house flipping worth the risk?
Reality TV shows on house flipping have created a skewed perception of what flipping homes actually entails. While purchasing, renovating, and reselling a property can be done quickly and profitably, it’s important to be prepared for potential challenges or surprises.
For instance, homes under construction are more likely to be targeted by thieves and vandals than other properties, leading to costly damages. Bad weather, pipe bursts, and other unforeseen issues can cause expensive repairs that weren’t factored into the original budget. This is why house flippers must be prepared for successful projects as well as the potential for unexpected problems.
The actual costs of house flipping
Even in an ideal situation, house flipping demands months of effort. Flipping a house involves a lengthy process, including finding the property, arranging financing, closing, renovating, and eventually listing it for sale. While the house is being flipped, it doesn’t generate income, as the profit only comes after it’s sold.
Some investors can take on several house flips in a year, aiming to create more consistent and frequent income. Yet typically, houses are flipped one by one, which makes it hard to gauge when the return on investment will occur. This is why house flippers need to ensure they have more than one stream of income. While real estate offers many opportunities, the most consistent income tends to come from residential rental properties. The process of buying and renovating rental properties is similar to flipping houses, but it has a few key advantages. Investors buying a home to rent out can benefit from hiring a reputable property management company. They manage everything from finding tenants and collecting rent to handling repairs, giving investors more free time and less stress.
Real Property Management Success can make managing rental properties in Taunton effortless, freeing up your time to focus on other areas of your real estate investments. For more information, contact us online or at 774-840-5140. We’re dedicated to helping you optimize your real estate investments.
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