Flipping houses can be a profitable way to make money, but it’s important to remember that the income from flipping isn’t steady. Flipping houses offers excellent prospects but is a high-risk investment that comes with various challenges. Investors may be waiting for months, sometimes even years, before they see earnings from one house flip.
To lessen these risks and maintain a steadier income stream, why not add one or two rental homes to your flips? Rental properties are some of the most reliable investments, delivering long-term growth that few stocks or retirement products can match.
Is house flipping worth the risk?
The surge in reality TV shows about flipping houses has shaped an unrealistic view of the realities involved in the process. While it’s possible to flip a home profitably in a short time, being mindful of possible challenges or unforeseen obstacles is crucial.
Homes that are under construction are more prone to theft and vandalism than other properties, which can result in significant financial losses. Storms, burst pipes, or other unexpected problems can lead to pricey repairs that were not part of the initial budget. For this reason, house flippers need to be ready for both smooth projects and the possibility of unexpected setbacks.
The actual costs of house flipping
Even under the best conditions, house flipping can take many months of work. Flipping a house involves a lengthy process, including finding the property, arranging financing, closing, renovating, and eventually listing it for sale. Throughout this process, the property doesn’t generate income, as the investor profits only after the house is sold.
Some investors manage to flip several homes a year, in an effort to achieve more regular and consistent income. More frequently, houses are flipped one at a time, which makes it harder to anticipate when the returns will be realized. This is why house flippers need to ensure they have more than one stream of income. There are plenty of opportunities in real estate, but residential rental properties present the most reliable income potential. Purchasing and renovating rental homes is much like flipping houses, though it comes with several distinct advantages. Investors purchasing a rental property can take advantage of hiring a good property management company. These companies handle key tasks like securing tenants, rent collection, and property upkeep, freeing investors from the stress of managing rentals.
The team at Real Property Management Dominion can make owning rental properties in Smithfield one of the simplest investments you’ve ever made, allowing you to focus on other areas of your real estate business. For more information, contact us online or at 757-395-4274. We’re here to ensure you maximize the potential of your real estate investments.
Originally Published on June 28, 2020
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