Pros and Cons of House Flipping
You want to buy a house. Then you want to buy another house and another one. If this sounds like you, you might enjoy the world of house flipping. This area of real estate can be exciting, especially if you enjoy the challenge of renovating homes. However, it comes with its pros and cons. What are some of the benefits and drawbacks of choosing to flip homes?
The Pros of Flipping Homes
If you are planning to buy a house, but you do not really want to stay, house flipping can be a way to produce income and develop your skills at the same time.
- Flipping homes can be exciting and lucrative. A real estate flip can provide healthy profits, sometimes even equal to what you might make in a year at your day job. When you choose to buy a home, renovate it, and then sell it again, you are gambling, but it is a gamble that often pays off.
- If you love construction, flipping homes can be a wonderful job. You come in and work on a home, increasing its value and developing skills in both management and in doing the construction work yourself.
- You will build your understanding of real estate in general and of your area specifically. You will also get a much deeper understanding of what the market is like in your area and what people like to buy. You will develop a network of contacts who can help you with future projects and sales as well.
- You will build your soft skills such as negotiation, the delegation of essential tasks, time management, and so on. Sharpening these skills will help you, not just with house flipping, but with any professional endeavor you choose.
The Cons of Flipping Homes
House flipping can be lucrative, so why would you hesitate? The problem is that it is not a guaranteed income.
- Houses are full of surprises. For example, a house that looks good on the outside could have asbestos or carpenter ants on the inside. It is possible to identify some of these problems with a home inspection, but you cannot always be certain what you will find when you start working on a particular house. You need to have the patience and financial resources to manage these surprises.
- House flipping is a lot of work with no guaranteed reward. You could spend many hours and a lot of time and money working on a house, only to have the housing market change during that time. You could lose your investment, or you could invest a lot more than previously planned.
- You can also be stuck with a house for a longer time if the market changes. With its increased value, you will also be responsible for managing the property taxes before you sell it. This can be a high cost if you have to keep the property for a while. You will also need to maintain the home during a period when it not selling as quickly as you would like.
Flipping houses is a lifestyle choice. If you love living in or managing a perpetual renovation and you enjoy the challenges that every day can bring when you are flipping houses, then you may enjoy doing this for a living or a hobby. However, though house flipping can be financially rewarding, it is not a choice that brings stability. Before you choose to become a flipper, consider whether you are able to manage the finances and logistics of house flipping and whether you love the uncertainty of it all.
At Open for Homes, we are here to support you as you look for more information about buying or selling a home. Whether you are renovating, buying a house, or entering the market for the first time, we can help. Visit the blog at Open For Homes today.