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 risky investment with promising returns, but it also presents significant 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 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 surge in reality TV shows about flipping houses has shaped an unrealistic view of the realities involved in the process. While flipping homes can be quick and profitable, it’s essential to stay aware of potential setbacks or unexpected challenges.
Houses under construction are particularly vulnerable to thieves and vandals, making them a target for crimes that can lead to substantial losses. Storms, burst pipes, or other unexpected problems can lead to pricey repairs that were not part of the initial 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
Flipping houses, even in ideal circumstances, involves 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. 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. However, in most cases, houses are flipped one at a time, making it challenging 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 offers many opportunities, but residential rental properties provide the most stable income. The process of buying and renovating rental homes is comparable to house flipping, though it has several distinct advantages. Investors purchasing a rental property can take advantage of hiring a good property management company. These companies oversee tasks such as tenant acquisition, rent collection, and maintenance, easing the investor’s workload and reducing stress.
The team at Real Property Management Honolulu can make owning rental properties in Kaneohe 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 808-445-9500. Our goal is to help you make the most of your real estate investments.
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