Can Flipping Houses Still be Profitable?

Nigel is showing me a new home
Creative Commons License photo credit: Casey Serin

In a tight economy, there are still people who invest in real estate. Some of them just have a lot of money that they can spend, but others must borrow money and get loans. This latter group represents the majority of people who invest, but many people who want to get involved are hesitant now. Will they still be able to get loans? Can they actually make any money doing that anymore? If you have those kinds of questions, you should know that it can still be profitable to flip houses – but there are some caveats.

First, it’s important to note that people who want to fix up and flip houses can’t really expect to get the kind of profit they were seeing when housing was booming. The prices were greatly inflated then, and they’ve come down quite a lot since that time. You can still make a profit, but don’t expect to get rich. Some people still do quite well, but if you’re just getting into it you may struggle and have a harder time. Working with someone who’s been doing it for a while can be a much better choice, so you can learn all you need to know.

With interest rates under five percent, borrowing money to buy a house, fix it up, and flip it isn’t too painful. Where you may run into trouble is getting the house sold again. Of course, many investors are still buying houses and fixing them up, only to rent them out. When the housing market recovers – and it will – then they’ll sell the house instead of renting it. Until that time, the rental income pays the mortgage that they have on the house, and they can continue to buy more houses to fix up and rent for a while, until they sell them for a good profit later.