Skip to Content

The Downside of House Flipping

Construction worker plastering and smoothing concrete wall in room of flipped home.Flipping houses can be a solid way to generate income, but keep in mind that the earnings are often inconsistent. 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 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?

The growing popularity of reality shows about house flipping has fostered a false perspective on what flipping houses truly involves. While it’s possible to flip a home profitably in a short time, being mindful of possible challenges or unforeseen obstacles is crucial.

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

Even in the best-case scenario, flipping houses requires several months of work. Flipping a house involves a lengthy process, including finding the property, arranging financing, closing, renovating, and eventually listing it for sale. During this time, no income is generated from the property, as the investor only earns a profit once the house sells.

Some investors are able to flip multiple houses in a year, hoping to generate more frequent and stable 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 sector has various opportunities, with residential rental properties offering the most consistent income stream. The process of buying and renovating rental properties is similar to flipping houses, but it has a few key 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 experts at Real Property Management Allies can turn owning Hiram 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 678-680-5065. We’re committed to helping you achieve the highest returns on your real estate investments.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details