Skip to Content

Real Estate Investing 101: Is Renting Better Than Flipping?

Polk County House With A For Rent Sign in the Yard When deciding to invest in single-family Polk County real estate, one of the first choices is between flipping or renting properties. While house-flipping offers quick profits, it comes with higher risks and sacrifices. On the other hand, buying properties for rentals can lead to steady wealth growth with fewer risks. Let’s explore the pros and cons of both approaches to understand why rentals can be a better investment. Visit berryhometeam.com for available properties in the Riverstone North Naples area.

Flipping: The Pros and Cons

For many individuals, flipping houses is a serious investment of time and money. The factors why house flipping magnetizes numerous investors is due to the potential for a huge, one-time payoff. Plus, there are some house flippers who have gained huge money.

Yet, that expected payoff includes a significant set of risks, commencing with having your money tied up in a flip for as long as it takes to renovate and sell it. You only generate money after finding, buying, remodeling, and then reselling the property. For many investors, that signifies your income is limited to the number of flips you can do in a year.

Flipping is also commonly volatile, with several probable dangers that can quickly eat into your profits. For instance, there’s no guarantee that the bargain property you procured will appreciate or be worth as much as you assumed once it’s ready to sell. Your income is totally at the mercy of fluctuations in the real estate market. Rising costs of materials, an absence of qualified service providers, or unethical or dishonest contractors, along with some other issues, can also make your renovations pricier, minimizing your potential payoff eventually.

Zillow: A Case Study

For a high-profile example of flipping gone wrong, take the story of Zillow. The corporation agreed to enter into the house flipping game by suggesting to purchase homes for sale and then turning around and selling them at a profit. At least, that was the primary objective. The challenge is that Zillow could not sell most of the purchased properties, leaving them with 7,000+ homes now worth less than what they paid for them. It’s every flippers nightmare – on a massive scale.

Investing in Single-Family Rentals

The ideal approach to minimize 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 ways to real, long-term profitability. There are numerous significant reasons for this.

First, one of the primary benefits of investing in rental homes is the possibility to earn short-term cash flows while growing your property values. As your properties appreciate, the compensation when you sell keeps pace with inflation over the years.

There are very few investments that can claim the same! Rental properties appear to be fairly stable in difficult economic circumstances, letting single-family rental property owners keep a consistent monthly income. Additionally, there are multiple tax benefits to owning rental properties, which can add up to big savings over time.

Perhaps the biggest reason some investors avoid single-family rental homes is because of the management they require. While owning rental homes typically takes less time and effort than flipping houses, rental homes still need active management to stay profitable.

The good news is that, when done properly, you can streamline your investment properties and reduce the amount of time they will require of you. When you employ a quality Polk County property management company, you can take most day-to-day tasks off your calendar, giving you time to focus on growing your investment portfolio.

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

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