There are many ways to invest in real estate. From renting out property to REIT Investments, some real estate investments are more lucrative than others. One of the best real estate investments is house-flipping. Many have seen the shows on HGTV and house-flipping has become very popular because of it. But a lot of the time, these popular TV shows don’t go over the true cost or gritty details of the hands-on, real estate investment:

What is House-Flipping?
For those who haven’t seen the TV shows and didn’t know what house-flipping is, it’s buying a property for a low price in a desirable neighborhood, making improvements to the home and selling it for a profit. This is typically short-term ownership since the longer you go without leasing to tenants or selling to another buyer, the more expenses will add up, which can ruin your profit in the end. Although house-flipping can be very profitable, there is some risk to this kind of investment. It’s best to start small with low-end properties before trying out higher-end flips.

The Profits
A lot of times, house-flipping can seem a little too good to be true. Buying a house for cheap then selling it for sometimes double can seem a little far-fetched. According to the real estate data company, ATOMM reported individuals making an average of $65,520 in profit from flipping houses in the United States. Although this calculation may not be accurate as it does not include some of the professional house-flippers make, it’s still a pretty lucrative profit. This number can decrease with lower-end flips and increase with higher-end flips.

The Drawbacks of Remodeling
Simply put, the more remodeling you commit to pottery, the more time it will take and the fewer profits you will see. The bigger the job, the more it will cost in the end. You may buy a house for cheap, but the cost to fix it up may not be worth it in the end. Tearing down walls or expanding rooms to create that desired open-concept style can lead to some serious problems. This kind of big remodeling will mean more time, a lot of money, and more resources. Sticking to simpler fixes and remodeling will give the bigger payoff. You need approval and permits for big changes to the property, but small changes require less money and less time.

House-flipping can be the most profitable form of real estate investment, but only if you do it right. Picking a property with less remodeling needs and opting for low-cost renovations is the way to go. Keeping the process as quick and lucrative as possible.