House flipping can be an excellent way to earn income, though it’s crucial to understand that the earnings aren’t always consistent. House flipping is a high-risk venture with great potential, though there are many obstacles to overcome. 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 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 growing popularity of reality shows about house flipping has fostered a false perspective on what flipping houses 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 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. For this reason, house flippers should be ready for projects that go smoothly and for the possibility of things going wrong.
The actual costs of house flipping
Even when things go perfectly, flipping a house still takes months of work. The time required for flipping a house is significant, from locating a property to securing financing, closing, renovating, and listing it for sale. Throughout this time, the property doesn’t generate income because profits from a flip only come once the house is sold.
Some investors are able to handle multiple flips in a single year, aiming for more frequent and steady income. More frequently, houses are flipped one at a time, which makes it harder to anticipate when the returns will be realized. This is why it’s important for house flippers to have additional sources 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 handle key tasks like securing tenants, rent collection, and property upkeep, freeing investors from the stress of managing rentals.
Real Property Management Concierge can make managing rental properties in Mahwah effortless, freeing up your time to focus on other areas of your real estate investments. For more information, contact us online or at 201-514-1603. We’re dedicated to helping you optimize your real estate investments.
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