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 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.
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It is tough to figure on flips because the financing is different on many of them. They also take much more work!
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Yeah poor Nikki. ;) lol
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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.
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REI is tough right now, especially in Seattle!
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Colorado too!
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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.
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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!
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Where in Germany are you?
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Where in Germany are you?
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I am from Karlsruhe in Southern Germany/Baden-Württemberg;-)
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