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The Advantages and Disadvantages of Flipping Houses

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The Advantages and Disadvantages of Flipping Houses

In the world of real estate investing, there are two main investment strategies: short-term and long-term investing. With short-term real estate investments, you can typically expect to turn your property into cash within half a year. House flipping is one of the most popular short-term investment strategies and involves buying distressed properties for cheap, fixing them, and selling them for more than you spent. While it’s a great way to make money on real estate, flipping houses has its own set of advantages and disadvantages, just like any other investment strategy. Read on to learn what they are.

The Advantages of House Flipping

Overall, house flipping is a great way to gain insight into the world of real estate investing and learn more about what buyers are looking for. Every time you fix and flip a property, you get a little better at learning how to make more on your next deal. You’ll also be able to build your own network of realtors and other investors.

The best part? Not only do you have total autonomy over the entire process, but house flipping is also the fastest and safest way to make money when comparing long-term versus short-term investments. You’re not limited to the types of properties you can flip either. If you want, you can flip commercial and residential properties.

The Disadvantages of House Flipping

While house flipping is the safest short-term investment strategy, that doesn’t mean it’s zero risk. Unforeseen expenses can seriously rack up how much you spend on refurbishing, and in some cases, you may ultimately spend more than you intended. On the subject of cash, you also have to keep in mind that flipping a property costs a lot of money. If you don’t have the funding, you can’t cover rehab costs.

Refurbishing isn’t something you can do overnight, either. It requires a lot of time and effort. People who are handy tend to profit more because they can fix properties on their own and save money. If you’re unwilling to take the time to learn how to fix things up yourself, you’ll have to fork over the cash to hire contractors.

Is House Flipping the Right Investment Strategy for You?

Now that you have an idea of the advantages and disadvantages of flipping houses, is this investment strategy right for you? The truth is, anyone can profit from flipping properties if they’re willing to put in the time and effort. What trips up most people is that the amount of energy they must invest in flipping a property will depend on their level of know-how. However, the harder you’re willing to work, the more you can profit from house flipping.

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