Flipping houses can be a solid way to generate income, but keep in mind that the earnings are often inconsistent. Flipping homes is a high-risk investment strategy with great potential, though it comes with many challenges. Investors might have to wait months, or even years, before earning any returns from a single flip.
To reduce these risks and create a more stable income stream, consider owning one or two rental properties alongside your flips. Rental properties are a highly stable investment, providing long-term growth that’s often unmatched by stocks or other retirement options.
Is house flipping worth the risk?
The rise of reality TV shows about house flipping has led to an unrealistic view of what flipping homes truly involves. Although it’s possible to buy, renovate, and sell a home quickly and for a profit, it’s important to recognize potential challenges and unforeseen hurdles.
For example, properties under construction are frequently targeted by vandals and thieves, potentially causing expensive 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 in the best-case scenario, flipping houses requires several months of work. The process of flipping a house is time-consuming, from finding a property and securing financing to closing, remodeling, and eventually putting it up for sale. While the house is being flipped, it doesn’t generate income, as the profit only comes after it’s sold.
Some investors manage to flip several homes a year, in an effort to achieve more regular and consistent income. However, more often than not, houses are flipped one at a time, making it hard to predict when the investment will pay off. 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. Purchasing and renovating rental homes is much like flipping houses, though it comes with several distinct advantages. Investors who buy a home to rent out can work with a trusted property management company. These companies take care of tasks like tenant placement, rent collection, and property maintenance, saving the investor time and reducing the stress of managing rentals.
The team at Real Property Management Elevation can make owning rental properties in Winchester 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 540-409-5857. Our goal is to help you make the most of your real estate investments.
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