Many people become introduced to the idea of making money via real estate through HGTV shows that are centered on flipping houses. And while it’s true that you can make large amounts of money through flipping homes, we consider this strategy very different from building passive income via real estate investing.
Flipping houses might be a great route for you to follow, but ultimately it depends on your goals are. While flipping is an effective way to make a profit, it is in no way passive. To decide if flipping is right for you, we recommend taking a hard look at what you want your lifestyle to be like.
Flipping houses is a process comprised of entails finding deals, fixing them up, and then selling those homes to make a profit. Usually flippers are on the hunt for looking for deeply discounted homes that are in disrepair. The potential for massive profit is alluring. Many flippers can make anywhere from $40,000 to $70,000 in one transaction, but that’s actually my qualm with flipping—it’s transactional!
Think of flipping houses like having a paycheck-based job. You always have to be working, you must always be on the hunt for the next project. Typically, flipping projects can take around six months to complete. Once the project comes to a close, you’ll need to move onto the next.
If you’re on the lookout for a full-time career, then maybe flipping could be right for you. For most new investors, passive income is the way to go. Buy and hold investing is a great way to make passive income without neglecting your family or taking on a second job. To make your experience as passive as possible, read this post on hiring a property management team.
Buy and hold real estate can be both passive and scalable. Each property brings you cash flow every month, the tax benefits are incredible, and it’s a great way to build your net worth. That’s why owning rental properties is the winner in my book.