I get asked this question all the time since I flip houses and have many rentals. It is a tough question to answer because they are very different investments and serve different purposes. I tend to think of house flipping as a way to earn income and rental property as a way to invest that income. The market you are in also has a huge part in if you can buy profitable rentals. I go into much more detail in the video below.
Is it Better to Flip Houses or Hold Rentals?
7 years ago in #youtube by investfourmore (70)
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Your ROI is better on the flips isn't it? Sounds like you're getting about 20% ROI on flips verses about 10% ROI on rentals per year my numbers could be off though.
It is tough to figure on flips because the financing is different on many of them. They also take much more work!
Yeah poor Nikki. ;) lol
For me rental is better, you have an assurance of monthly income. Choose a good location of the houses so that one can have many clients.
REI is tough right now, especially in Seattle!
Colorado too!
For me i think holding rentals is much better than buying an asset, improving it and selling it off quickly for profit because when you have a rented profit, you are always sure of some amount of money to be coming your annually or monthly depending on the agreement you had with your tenant. After getting a good amount of money, then I can go into flippening houses, that requires a huge capital to go into it.
I think flipping houses is a good way to earn the needed capital for investing in good rental objects Especially if you can buy the house very cheap due to a compulsory sale and restore it yourself to sell it for a good price. Investing in rentals is a good way to earn passive income on the long run. As the realestate prices in Germany have skyrocketet it's important to make a good research about the location first in order to secure long-term cash flows!
Where in Germany are you?
Where in Germany are you?
I am from Karlsruhe in Southern Germany/Baden-Württemberg;-)