Thread: Rehab and flipping vs rental properties in new england

Hi Raymond!

I can't speak for your area in specific simply because I am unfamiliar with the market, trends and so on, but I can give you some info on the question as a whole.

I have actually done both of these, renting and flipping in the past. For me the renting was a nightmare. You are dealing with tenants that don't care about the house and usually won't take care of it and you just kind of have this involvement in a families life, that was uncomfortable for me.

As far as I am concerned in the home rental industry there is just way to much involvement, depending on the tenant your security deposit doesn't ever cover the actual cost of turning the place over for someone new. If it doesn't and you want to do something about you have to go to court and go through that whole process, its a headache. But I know that some people make great money and enjoy doing this, it just wasn't for me.

Flipping houses on the other hand, I loved it. For the most part its quick, you get in there flip it, sell it and take you and your profit on to the next one. You really have to look at the current prices in the area and be absolutely sure that you can recover your costs and make some money after the sale. I know a lot of these people go in do a great job flipping the house and then it sits on the market for months which of course is costing them a fortune. If you can't sell it right away you may want to turn it into a rental just to get some money coming in from the property before it destroys you.

Hopefully this helps a little bit, I am not the worlds expert in either area, but I have experienced both sides and thought I would give you my input.

if you do a lot of the work yourself and have the knowledge to get it permitted, then you can probably still make money flipping houses if your market is strong enough. however, most markets in the US are currently in varying levels of decline (slow or drastic) after many years of appreciation. i would generally say that it is much harder to make money flipping houses in a declining market than in a rising market. the guy who wrote the cashflow series of books liked to say "you make your money when you buy not when you sell". now i don't agree with a lot of what he said, but i think that is a very important lesson. if you are flipping a house in a declining market, then you should be confident that you could sell the property for substantially more than you are buying it for without making any improvements at all. that is a good test if it's really a good deal.