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 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 homes are one of the most secure investments, offering investors long-term growth that stocks or other retirement options rarely provide.
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 flipping homes can be quick and profitable, it’s essential to stay aware of potential setbacks or unexpected challenges.
For instance, homes under construction are more likely to be targeted by thieves and vandals than other properties, leading to costly damages. Severe weather, burst pipes, and other unexpected events can lead to costly repairs that weren’t accounted 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 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.
Certain investors can flip several houses a year, with the goal of creating a more consistent income stream. 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 it’s important for house flippers to have additional sources of income. The real estate industry provides numerous opportunities, but the most stable income comes from residential rental properties. 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. They manage responsibilities like finding tenants, collecting rent, and handling maintenance, giving investors more time and less stress.
Real Property Management Tampa St Pete can make managing rental properties in New Port Richey effortless, freeing up your time to focus on other areas of your real estate investments. For more information, contact us online or at 813-445-4600. Our goal is to help you make the most of your real estate investments.
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