House flipping can be an excellent way to earn income, though it’s crucial to understand that the earnings aren’t always consistent. Flipping homes is a high-risk investment strategy that offers strong potential but comes with many difficulties. Investors may face delays of months or even years before realizing profits 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 a highly stable investment, providing long-term growth that’s often unmatched by stocks or other retirement options.
Is house flipping worth the risk?
Reality TV shows on house flipping have created a skewed perception of what flipping homes actually entails. 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 instance, homes under construction are more likely to be targeted by thieves and vandals than other properties, leading to costly damages. Bad weather, pipe bursts, and other unforeseen issues can cause expensive repairs that weren’t factored into 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 can take a long time, including finding a property, securing financing, closing, renovating, and listing it for sale. While the house is being flipped, it doesn’t generate income, as the profit only comes after it’s sold.
Certain investors can flip several houses a year, with the goal of creating a more consistent income stream. Yet typically, houses are flipped one by one, which makes it hard to gauge when the return on investment will occur. 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. When buying a rental property, investors can seek the assistance of a reliable 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.
Real Property Management Ignite can make owning rental properties in Prineville 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 541-550-7002. We’re here to ensure you maximize the potential of your real estate investments.
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