House flipping is appealing because it’s quicker than renting out a property for years. In a matter of months, you could get the house back on the market and (hopefully) turn a nice profit. But just like other investments, there’s a risk of losing money— especially if the market changes or the house turns out to be a dud. Plus, flipping houses isn’t as glamorous as TV shows make it seem. If you love hands-on work (and actually know what you’re doing), then have at it! If you don’t, you’d better hire a contractor. That’s why, just like with buying a rental, you should get into house flipping only if you have a full emergency fund and you can pay cash for the properties. When you take debt out of the equation, the risks involved with house flipping aren’t nearly as big of a deal. You’ll also want to budget plenty of time and money for any repairs or upgrades you’re planning to make. Renovations almost always cost more (and take longer) than you think they will, and you’ll want to pay cash for them too. Before you jump into house flipping, talk to a real estate agent about the potential to successfully flip houses in your area. They’ll help you figure out how to get into real estate investing based on your local market.
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