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 homes is a high-risk investment strategy that offers strong potential but comes with many difficulties. Investors might have to wait months, or even years, before earning any returns from a single flip.
To minimize these risks and generate a more consistent income, you might consider owning one or two rental homes in addition to your flips. Rental properties are considered one of the most dependable investments, providing long-term growth that is seldom matched by stocks or other retirement products.
Is house flipping worth the risk?
Reality television’s focus on house flipping has given many an unrealistic idea of what flipping properties really involves. While it’s possible to flip a home profitably in a short time, being mindful of possible challenges or unforeseen obstacles is crucial.
One example is that homes under construction are often more vulnerable to theft and vandalism, which can lead to expensive losses. Unfavorable weather, burst pipes, or other unexpected events can result in costly repairs that weren’t planned for in the original budget. House flippers need to be prepared for both when everything goes right and when unexpected challenges occur.
The actual costs of house flipping
Even in the best-case scenario, flipping houses requires several months of work. The time required for flipping a house is significant, from locating a property to securing financing, closing, renovating, and listing it for sale. During this period, the property doesn’t bring in any income since the investor only profits after the sale.
Certain investors can flip several houses a year, with the goal of creating a more consistent income stream. More frequently, houses are flipped one at a time, which makes it harder to anticipate when the returns will be realized. For this reason, having more than one source of income is vital for house flippers. 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 house flipping, but with a few clear benefits. When purchasing a home as a rental, investors have the option to hire a quality 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 experts at Real Property Management Charleston can turn owning Charleston rental properties into one of the easiest real estate investments, letting you pursue other aspects of your real estate business. For more information, contact us online or at 843-900-4061. We’re committed to helping you achieve the highest returns on your real estate investments.
Originally Published on June 28, 2020
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