Many of you may think I feel flipping houses is better than buying rentals since all I seem to talk about is house flipping. I have 20 flips going right now and have flipped over 150 houses in my career. However, I actually think rentals are a better investment.
Flipping is not really an investment at all, it is a job or a business. House flipping earns income where rentals are a true investment. When I sell a flip, I get no more money until I find another house, fix it up, and sell it. With a rental it will keep making me money as long as I own the home.
I love flipping and I have made a lot of money from house flipping, but I love rentals more. I wish I had more rentals and I wish my market was better suited for rentals. One of the problems with rentals is that you cannot make money with them everywhere. My market has gotten too expensive to cash flow with residential properties. I almost bought rentals in Florida, but actually ended up buying commercial rentals closer to me instead.
https://investfourmore.com/2013/04/19/is-it-better-to-fix-and-flip-houses-or-buy-and-hold-rentals/
I bought a 68,000 square foot commercial rental this year that has been an amazing investment. One of the really cool things about rentals is you can often get all the money you spent buying them and fixing them up by refinancing them. When you refinance you can take cash out tax-free. In fact, when I had 14 rentals I had basically put no money into them and was making $8,000 a month after all expenses.
https://investfourmore.com/2016/12/19/how-i-have-bought-14-rentals-without-any-of-my-own-money/
I bought a commercial rental last year that I fixed up, rented, and refinanced this year. I was able to get most of the down payment and cash I spent fixing up the property back, plus I am making over $1,000 a month from it.
Rentals also have amazing tax advantages. The interest on the loan is deductible as are most expenses. You get to depreciate the property as well. https://investfourmore.com/2014/06/06/tax-advantages-rental-properties/
Flipping is awesome and it makes me a lot of money, but rentals are the best investment fo me.
https://investfourmore.com/2018/07/09/can-you-make-a-lot-of-money-with-rental-properties/
What about the ROI's? Seems like flipping has a better ROI.
Short term yes, but not long term
Buy and hold 90% of the time... flip if you get a crazy return due to special situation. Then take your profits from the flip and buy a rental :p
That's right! Agreed my man. I'm a buy and hold guy (though one reno I did was considering flipping) cause that is where the passive income is, but can make much more faster successfully flipping. Like you said though, it is a job.
I own rentals and live in South Florida and like you said, rentals don't work everywhere. I have been looking out of state as of a month ago, time to expand out of FL, numbers here are rough. Headed to SC in a couple weeks to check some stuff out.
I like the space coast area
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