Around for many years now, house flipping is still a popular way for people to make money, and often doing something they love. Buying a house at a low price, fixing it up and selling it for a higher value, is an enticing prospect, but is it the right thing to be doing right now, or is it too much of a risk?
House flipping now – too risky or worth the risk?
Experienced house flippers might well find that now is a great time for finding a bargain property and flipping it for a profit, especially as house prices in Canada are falling.
With a hot real estate market, flipping houses is an affordable and often lucrative way to take advantage of it, and housing investment remains strong in spite of COVID-19 and the havoc it wreaked on us all. In fact, some cities are witnessing significant returns in real estate investment, such as Hamilton, Windsor, Guelph, Kingston, Calgary and Gatineau, to name but a few.
How do house flippers buy properties?
For anyone making flipping houses their full time job, they’ll typically use short term financing through private lenders. Private lending loans enable investors access to extra capital to complete the house flipping project – even to finance. Giving investors the ability to pay off any maturing loans, and use funds to complete the project, short term loans are a popular source of income for seasoned flippers.
What can investors do instead of selling a flipped property?
While many house flippers do so purely to sell the renovated property for a profit, some choose to keep the property and rent it out to paying tenants. With rental prices at their highest in Canada, and more and more people opting to rent (or being left with no choice) than ever before, renting out a property has become an attractive and profitable option for many homeowners.
House flipping and cashflow
Cash is king, and likely always will be, and just because your cash is tied up in a property, doesn’t mean that you can’t avail of such opportunities as accessing available equity through blanket mortgages/cross-collateralization, or tapping into extra capital to buy another property at a reduced cost to flip, and expand your investment portfolio.
Is house flipping right for you? Ultimately, that’s a question only you can answer. But if you’ve got some experience in it, the Canadian real estate market is ripe for flipping right now, and with a mortgage broker to help you get a great deal on a loan, you could soon be flipping for profit!