While flipping houses can bring in substantial income, one fundamental point is that the earnings are not consistent. House flipping is a risky investment with promising returns, but it also presents significant challenges. It can take investors months, or even years, to see profits from just one flip.
To lower these risks and establish a more reliable income, you could add one or two rental properties to complement your flips. Rental properties are among the most stable investments, offering long-term growth that is hard to match with stocks or other retirement products.
Is house flipping worth the risk?
Reality TV shows on house flipping have created a skewed perception of what flipping homes actually entails. While flipping homes can be quick and profitable, it’s essential to stay aware of potential setbacks or unexpected challenges.
One example is that homes under construction are often more vulnerable to theft and vandalism, which can lead to expensive losses. Harsh weather, burst pipes, and other unforeseen events can cause expensive repairs that were not part of the initial budget plan. House flippers need to be prepared for both when everything goes right and when unexpected challenges occur.
The actual costs of house flipping
Even under the best conditions, house flipping can take many months of work. Flipping a house requires a lot of time, from finding the property and securing financing to closing, renovating, and finally listing it for sale. Throughout this process, the property doesn’t generate income, as the investor profits only after the house is sold.
Some investors are able to flip multiple houses in a year, hoping to generate more frequent and stable 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. The real estate industry provides numerous opportunities, but the most stable income comes from residential rental properties. The process of buying and renovating rental properties is similar to flipping houses, but it has a few key advantages. When purchasing a home as a rental, investors have the option to hire a quality property management company. They manage responsibilities like finding tenants, collecting rent, and handling maintenance, giving investors more time and less stress.
The experts at Real Property Management Abound can turn owning Tulsa 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 918-984-4433. We’re here to ensure you maximize the potential of your real estate investments.
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