Flipping houses can be a profitable way to make money, but it’s important to remember that the income from flipping isn’t steady. House flipping is a risky investment with promising returns, but it also presents significant challenges. Investors may face delays of months or even years before realizing profits from a single flip.
To offset these risks and create a more consistent income stream, why not invest in one or two rental properties along with your flips? Rental homes are one of the most secure investments, offering investors long-term growth that stocks or other retirement options rarely provide.
Is house flipping worth the risk?
The growing popularity of reality shows about house flipping has fostered a false perspective on what flipping houses truly involves. While it’s possible to flip a home profitably in a short time, being mindful of possible challenges or unforeseen obstacles is crucial.
Houses under construction are particularly vulnerable to thieves and vandals, making them a target for crimes that can lead to substantial 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 should be ready for projects that go smoothly and for the possibility of things going wrong.
The actual costs of house flipping
Even when things go perfectly, flipping a house still takes 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 can take on several house flips in a year, aiming to create more consistent and frequent 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 it’s important for house flippers to have additional sources of income. There are plenty of opportunities in real estate, but residential rental properties present the most reliable income potential. The process of buying and renovating rental properties is similar to flipping houses, but it has a few key advantages. Investors purchasing a rental property can take advantage of hiring a good property management company. These companies oversee tasks such as tenant acquisition, rent collection, and maintenance, easing the investor’s workload and reducing stress.
The professionals at Real Property Management One Source can simplify owning rental properties in McKinney, giving you more time to focus on other parts of your real estate business. For more information, contact us online or at 214-721-0727. We’re here to ensure you maximize the potential of your real estate investments.
Originally Published on June 28, 2020
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