More Investors Bypass 'Flipping' for Renting

September 29, 2011

The days of flipping houses for big profits have all but vanished in many markets as more investors see bigger profits in rentals, according to an article by CNNMoney. 

Investors flipped half of their purchases in July, which is down from 75 percent a year prior, Tom Popik, research director for Campbell Surveys, told CNNMoney. The other properties were being held onto to rent out, he notes. 

A recent survey by the company HomeVestors found that their investor clients were 57 percent more likely than two years ago to buy a property for renting than to flip. 

Rentals are serving as a bright spot in real estate. Demand for rentals has been on the rise, and rents are up about 25 percent from a few years ago. Housing analysts say that investors are buying properties cheaply and then earning good returns immediately from renting them out. 

Investors haven’t completely turned their back on flipping homes for profit, though. For example, markets like San Diego are reporting home prices rebounding in some neighborhoods, which is making flipping an option there once again. 

Source: “‘I Can’t Flip This House,’” CNNMoney (Sept. 29. 2011)