House flipping seems to be the new reality show trend with the featured hosts or buyers making it look so easy. But ask around and you’ll find that this may not really be the case. House flipping can be hard work and, for beginners, quite risky. Add to that the fact you’ll have to consistently do it well to make a living out of it.
What’s the Catch in Flipping?
House flipping is, in a sense, a timed business. Buy low, fix it up fast, and sell the house as soon as possible. Why favor a quick sale? You can lose money through mortgage payments, insurance, and other related fees like travel expenses. If you managed to buy a house in Salt Lake City and you live in Provo, you will need to spend time and money going back and forth, or spend extra to rent a place to stay. Therefore, the longer the time it takes to sell, the more money you lose.
What Happens if You Lease?
As long as you make sure that the rent can cover all the associated expenses and the mortgage of the property in your Salt Lake City home, you do not have to worry about the expenses listed above. You can even work out a rent-to-own deal with your tenant where the payments become installments to purchase the house from you. You can choose to manage the property yourself or, if you do not want the hassle, hire a reputable and trustworthy property management firm. All you need to do is pay them their fee and you’ll receive the rent regularly through your desired channel.
Even if the rent only covers the expenses or even falls a little short, you can still be prepared the house for flipping but rent it out while you are waiting for a sure sale. By doing this, you can reduce the loss of profit. Don’t forget to do your due research and, if you buy enough houses for lease, you can easily build a steady monthly income that does not rely on your own constant hard work.