While flipping houses can bring in substantial income, one fundamental point is that the earnings are not consistent. Flipping houses offers excellent prospects but is a high-risk investment that comes with various challenges. It can take investors months, or even years, to see profits from just one 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 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?
The rise of reality TV shows about house flipping has led to an unrealistic view of what flipping homes truly involves. 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 example, properties under construction are frequently targeted by vandals and thieves, potentially causing expensive losses. Unfavorable weather, burst pipes, or other unexpected events can result in costly repairs that weren’t planned for in the original budget. That’s why house flippers should prepare for both when things go as planned and when issues arise.
The actual costs of house flipping
Even in an ideal situation, house flipping demands months of effort. 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 are able to flip multiple houses in a year, hoping to generate more frequent and stable income. More commonly, houses are flipped individually, making it difficult to determine when the investment will finally pay off. For this reason, having more than one source of income is vital for house flippers. While real estate offers many opportunities, the most consistent income tends to come from residential rental properties. The process of buying and renovating rental homes is comparable to house flipping, though it has several distinct advantages. Investors buying a home to rent out can benefit from hiring a reputable 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 Boston can turn owning Boston 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 617-522-0099. We’re committed to helping you achieve the highest returns on your real estate investments.
Originally Published on June 28, 2020
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
