4 Reasons You Should Flip Houses Instead of Renting Them

Real estate offers all sorts of investment opportunities, but the two most common options are flipping houses and buying properties for the purpose of renting them out. There’s quite a bit of debate over which one is a better option. Both will make you money, but flipping houses will bring in money faster. So, take a look at these four reasons why you should flip houses instead of renting them out.

Tenants Could Ruin or Damage Your Rental House

Screen Tenants

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There are all sorts of things that can go wrong with a rental property because of your tenants. Even if you carefully screen tenants, you may still have problems. The biggest risk is that they will damage your rental house and you will have to spend money to fix it.

Sometimes the security deposit isn’t enough to cover the damage to your rental property. For instance, if you find out your tenants had drugs in their possession or smoked heavily in the house, the smell or chemicals might have seeped into the walls, making a huge clean-up project for you.

You Have to Worry About Maintenance as a Landlord

Property Maintenance

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Another reason why renting houses is more hassle than it’s worth is all the maintenance you have to worry about. You may get constant calls from tenants about the need for repairs.

As a landlord, it is your responsibility to make sure your rental property is safe for tenants and everything is running properly. This can be a huge time commitment, especially if your rental house is over twenty years old. Sometimes you might not even make a profit from the rental income because you have to turn around and put that money back into the house.

You Can Make More Money Flipping Houses than Renting Them

Make Money Flipping Houses

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Unless you own several income properties (over 10) and dedicate all of your time to managing them, it is more cost effective to flip houses than rent them out. This is because you can make a huge profit from buying and reselling homes without much time commitment.

If you buy a house for $150,000 and then sell it in 90 days with a profit of 10 percent, you’d make $15,000. You may or may not make that much in a year from renting it out. Plus, you won’t have to carry the mortgage during the time it is on the market or pay interest. So, if you flip only five houses in one year, you still make $75,000. You would have to own up to ten houses to make the same amount from rental income.

House Flipping Is Risky, but so Is Being a Landlord

Being a Landlord

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Some people say to avoid house flipping because it is too risky. However, it’s really no riskier than buying a house and renting it. You can encounter problems in both scenarios. So, when you’re flipping houses, you just have to carefully think out your investments and buy houses for less than they are worth so that you can make a profit from reselling them.

Typically, the best option depends on your long and short term goals, but what do you think? Is it better to flip houses or buy properties and quickly flip them for a profit?

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