Flipping homes can be a lucrative income stream, but it’s key to note that the income isn’t always reliable. Flipping houses offers excellent prospects but is a high-risk investment that comes with various challenges. Flippers could be waiting months or even years to see the returns from one flip.
To offset these risks and create a more consistent income stream, why not invest in one or two rental properties along with 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. While it’s possible to flip a home profitably in a short time, being mindful of possible challenges or unforeseen obstacles is crucial.
Homes that are under construction are more prone to theft and vandalism than other properties, which can result in significant financial losses. 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 need to be ready for both smooth projects and the possibility of unexpected setbacks.
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. Throughout this time, the property doesn’t generate income because profits from a flip only come once the house is sold.
Some investors manage to flip several homes a year, in an effort to achieve more regular and consistent income. However, in most cases, houses are flipped one at a time, making it challenging to predict when the investment will pay off. For this reason, it’s crucial for house flippers to maintain multiple revenue streams. The real estate industry offers many opportunities, but residential rental properties provide the most stable income. Purchasing and renovating rental homes is much like house flipping, but with a few clear benefits. Investors purchasing a rental property can take advantage of hiring a good property management company. They manage everything from finding tenants and collecting rent to handling repairs, giving investors more free time and less stress.
The team at Real Property Management Absolute can make owning rental properties in Hudson one of the simplest investments you’ve ever made, allowing you to focus on other areas of your real estate business. For more information, contact us online or at 603-242-2727. We’re dedicated to helping you optimize your real estate investments.
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