Remember back in the early days of the 21st century when house flipping was the real estate investment strategy du jour? You find a decrepit old property, buy it for a song, fix it up on the cheap and sell it for a massive return on your investment.
In 2012, it might be tempting to try to get back into the flipping market again. After all, home prices are at rock bottom and interest rates are the lowest they’ve been in decades. But is it still realistic to believe you can make money flipping houses?
The short answer is no, you probably can’t. Yes, there are still some professionals out there making money on house flipping. But unless you’re an experienced handyman or contractor with loads of renovation experience and/or a real estate agent, you’re probably going to find yourself waist-deep in a home renovation project you can’t finish.
Even if you do find a great house for a low price and manage to fix it up yourself for a small investment, what happens then? Home prices are low, which is great for you as a buyer, but when you then turn around and sell that property, you’ll run into exactly the same problem. Home flipping worked so well in the last decade because people were clamoring for houses, any houses, which meant prices for any decent home were through the roof. But now, with so much excess inventory on the market, you simply can’t expect to sell your flipped house for a huge mark up.
These days, a better real estate investment is to consider rental properties. More and more people are turning to renting instead of owning, meaning there’s a large supply of tenants, driving rental prices up. Flipping a property brings in a big, quick payday, but rental properties pay out over the long term with steady, regular income.
If you’re interested in learning how to invest in real estate in today’s market, call the experienced Indianapolis property management company Polaris Property Management. We’ll help you decide what strategy works for you, help you find a great rental property and take all the headache out of managing the home.