House flipping is one of the most financially risky business ventures anyone can take, and the risk gets even larger if you’re brand new to this line of work. But, although it’s expensive, and there are tons of ways it can go wrong: there’s the promise of a major payoff at the end of the road that makes so many people get into this line of work.
Whether you’re selling your home and considering buying another so that you can flip it, or you’re in the market for your first home ever: there are tons of reasons to scan and update properties. These are the pros and cons of getting into this business.
The unpredictability of house flipping is due to the nature of homes themselves. These cost hundreds of thousands of dollars, yet could easily flood, catch on fire, have massive problems we missed on inspections, or be in areas where nobody wants to buy a home.
When you go into this, even if you feel like you know everything about the job and the market: you may still be surprised when it comes to house flipping. You must study your area, study homes and how they’re built and renovated, and get to know the market, all before you buy your first property, you plan to flip.
The Payouts Can Be Massive
The amount of money you can make on a single flipped home can be more than the amount some people make in a year of working a salaried job. This huge payoff means that you can buy another house and then another until you have multiple properties being flipped simultaneously.
Another option many turn to in this line of work is maintaining and renting out at least a couple of properties to ensure that they have another source of income while flipping. This will save them if the housing market crashes and ensure that home improvement financing is all they’ll generally need when updating a property.
You Can Build a Team of Employees
Being a house flipper doesn’t mean you have to do the work alone! Instead, you can build a team of employees who can help you: but of course, you’ll have to pay them. However, this can speed up flips and allow you to finish projects far more quickly, which means a larger income and a better chance at making a ton of money in the long run.
There’s No Way to Predict the Housing Market
The housing market will change and fluctuate independently, never completely transparent or predictable. Because of this, going into this business is incredibly risky. You may assume it’s as easy as selling in a sellers’ market and buying in a buyers’ market, but there’s no way to tell how long these markets will last and what is or isn’t a housing bubble. Of course, we all want to make financially sound choices, but it can be hard with something as unstable as the housing market.
Everyone Deserves a Rewarding Career
Although there’s no clear way to say whether you’ll succeed or fail in this role until you’ve tried it: getting to figure that out along the way can be thrilling. Consider going into flipping homes and what this career can do for you.