Buying to flip versus buying to turn into rental properties

[Jasz]

Buying to flip versus buying to turn into rental properties: which will make you more money? Buying a house and then selling it again for a profit is known as “flipping”. Flipping is often seen as more profitable than buying a home to rent out, but it can be risky if you don’t know what you’re doing. Here’s how flipping compares to renting out property, and why you should really consider the latter.

Pros of flipping

When done right, flipping can be a good way to make money on property. You can use your profits from the sale of one property to buy another one that needs fixing up, then sell that too when it’s ready (and so on). You can also build up an impressive portfolio over time by making small profits on several flips over time.

Cons of flipping

Flipping comes with risks too: there’s no guarantee that each property will sell at its asking price; there are fees associated with selling real estate; and finding buyers who have enough cash for the purchase may not be easy if the market is slow or prices are falling (which happens more often than not).

 

[cmoneyspinner]

Investing in real estate is loaded with all kinds of ways to make money. My husband owned rental property and if you have good tenants, then it's great! If you have difficult tenants, it's a huge problem. My son preferred to flip a property. The problem with that is that you have to keep paying all of the bills as if you live in the house - utilities, the mortgage payment, etc. The longer you hold the property and have to pay these expenses, the more it reduces the profit you will make. The quicker you can flip a property, the better it is. The better the tenants are, the better it is to have a rental property. Flipping is good for short-term. Rentals are good for long-term.