While flipping houses can bring in substantial income, one fundamental point is that the earnings are not consistent. 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 lower these risks and establish a more reliable income, you could add one or two rental properties to complement 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. Although flipping a home for profit can be done swiftly, it’s vital to understand potential difficulties or surprise issues that may arise.
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. That’s why house flippers should prepare for both when things go as planned and when issues arise.
The actual costs of house flipping
Flipping houses, even in ideal circumstances, involves months of effort. Flipping a house requires a lot of time, from finding the property and securing financing to closing, renovating, and finally listing it for sale. Throughout this process, the property doesn’t generate income, as the investor profits only after the house is sold.
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. 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. Buying and renovating rental properties is quite similar to house flipping, but it offers some clear advantages. Investors who buy a home to rent out can work with a trusted property management company. These companies oversee tasks such as tenant acquisition, rent collection, and maintenance, easing the investor’s workload and reducing stress.
Real Property Management Titan can make owning rental properties in Columbia incredibly easy, giving you the time and freedom to focus on other parts of your real estate portfolio. For more information, contact us online or at 615-538-7711. We’re committed to helping you achieve the highest returns on your real estate investments.
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