Why so many rental investors?

Question

Most of the threads I read on here have to do with buying and renting out real estate. Why so few flippers?

Joe Villeneuve · Answer

Profits from flips are gone when spent, and you have to work on another flip to get it again.  That means the work you do gets you a one-to-one relationship with the returns (profit).

Holding (rentals) returns are repeated as long as you did a good job analyzing the property.  It should be the gift that keeps on giving.

Flipping makes you rich...holds make you wealthy.

Aaron K. · Answer

1. Renting is harder to screw up

2. Renting is seen as more passive (it's not completely so) and flipping is more of a job

Robert C. · Answer

@Joachim Roselio, I’ll add one more. In markets like mine, people with greater cash constraints will tend to do flips because the relative return in the short run is greater than the cash flow from rentals. Flips are used to accelerate returns that can later be used on long term hold rentals.

David Dachtera · Answer

@Joachim Roselio,

The other posters have pretty well covered it, but just to sum up:

If you do it right, rentals are a stream of income. Keep 'em rented, the income continues. If you finance them right, they build equity before the balloons come due, if any, or before some other situation raises the need to refinance.

Rehabs and flips produce a "lump sum". Need more? Lather, rinse, repeat.

The way the economy is trending, we're likely to see a bunch of income property become quite affordable before too much longer. So, marshal your financial resources and stock up when it does.

Jay Hinrichs · Answer

rentals are very basic to under stand  buy rental rent it out..

flips are much more complicated..  and harder to finance  rentals get bank financing if U cant qualify for bank financing on a rental then U should not own one  LOL.. exceptions of course for those that are using IRA or foreigners or over their loan limits.

one is a slow road  ( rentals ) one can be a fast road if you have the capacity and know what your doing. its uber competitive though for the inventory.. which lead me about 5 years ago to slowly roll over to all NEW construction.. far less competition simply because its MUCH harder to get vertical financing.. it was at least.. now some of the bigger HML have come in the space but you need experience.. you need no experience to get your first rental property loan ZERO none.. just Fico and some cash down and some reserves..

Joachim Roselio · Answer

That makes sense. It probably also falls in line with most new hopefuls have full time jobs and therefore limited time to oversee a project.

Why so many rental investors?

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