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Real Estate Investing 101: Is Renting Better Than Flipping?

Brooksville House With A For Rent Sign in the Yard One of the initial choices that single-family Brooksville real estate investors make is: flipping or renting? Even though house-flipping does include some advantages, several house flippers also undertake enormous risks and usually make huge sacrifices to get the property ready to sell. On the flip side, buying properties to rent can become one of the quickest strategies to grow real wealth without the risk or sacrifice of flipping – as long as it is executed right. To better comprehend why rentals are a better investment than house flipping, let’s analyze the pros and cons of both.

Flipping: The Pros and Cons

For several individuals, flipping houses is a major investment of cost and resources. The reason house flipping catches the attention of numerous investors is due to the potential for a huge, one-time payoff. And there are some house flippers who have achieved huge money.

But that wished-for payoff accompanies with a pretty significant set of risks, starting with having your money tied up in a flip for as long as it takes to renovate and sell it. You only receive revenue after finding, buying, remodeling, and then reselling the property. For numerous investors, that implies your income is limited to the number of flips you can do in a year.

Flipping is also inherently volatile, with many potential problems that can quickly eat into your profits. For illustration, there’s no guarantee that the bargain property you bought will appreciate or be worth as much as you hoped once it’s ready to sell. Your income is completely at the mercy of fluctuations in the real estate market. Rising costs of materials, a lack of qualified service providers, or unethical or dishonest contractors, along with any number of other problems, can also make your renovations more costly, reducing your potential payoff in the end.

Zillow: A Case Study

For a high-profile example of flipping gone wrong, take the story of Zillow. The corporation agreed to start into the house flipping game by proposing to acquire homes for sale and then turning around and selling them at a profit. Anyhow, that was the initial intention. The concern is that Zillow could not sell numerous purchased properties, leaving them with 7,000+ homes now worth less than what they paid for them. It’s every flippers nightmare – on a vast scale.

Investing in Single-Family Rentals

The ideal method to reduce risk while growing wealth is to invest in rental real estate. Single-family rental homes have proven time and time again to be one of the greatest routes to real, long-term profitability. There are numerous big reasons for this.

Primarily, one of the significant benefits of investing in rental homes is the ability to receive short-term cash flows while growing your property values. As your properties appreciate, the payout when you sell keeps pace with inflation over the years.

There are very few investments that can guarantee the same! Rental properties appear to be fairly stable in difficult economic circumstances, permitting single-family rental property owners to maintain a steady monthly income. There are also various tax benefits to owning rental properties, which may build up to large savings over time.

One of the major factors some investors avoid single-family rental homes is because of the management they need. Even though owning rental homes normally takes less time and effort than flipping houses, rental homes still need active management to stay profitable.

The good news is that, when performed correctly, you can streamline your investment properties and reduce the amount of time they will require of you. When you work with a quality Brooksville property management company, you can shift most day-to-day tasks off your calendar, keeping you available to focus on growing your investment portfolio.


Contact Real Property Management Connection to learn more about our full range of high-quality services. You can call the office or contact us online.

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