While flipping houses can bring in substantial income, one fundamental point is that the earnings are not consistent. Flipping houses offers excellent prospects but is a high-risk investment that comes with various challenges. Investors might have to wait months, or even years, before earning any returns 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 television’s focus on house flipping has given many an unrealistic idea of what flipping properties really involves. While it’s possible to flip a home profitably in a short time, being mindful of possible challenges or unforeseen obstacles is crucial.
For example, properties under construction are frequently targeted by vandals and thieves, potentially causing expensive 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 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. During this period, the property doesn’t bring in any income since the investor only profits after the sale.
Some investors are able to handle multiple flips in a single year, aiming for more frequent and steady income. More commonly, houses are flipped individually, making it difficult to determine when the investment will finally pay off. For this reason, having more than one source of income is vital for house flippers. While real estate offers many opportunities, the most consistent income tends to come from residential rental properties. 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. 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.
The experts at Real Property Management Stellar can turn owning Jefferson rental properties into one of the easiest real estate investments, letting you pursue other aspects of your real estate business. For more information, contact us online or at 404-375-4639. We’re dedicated to helping you optimize your real estate investments.
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