Flipping is the practice of buying a repossessed or distressed home and re-selling at a profit. This can be a very lucrative investment if you do it right. The key is to find a foreclosure or 'fixer-upper' that's listed at much lower than the market rate and that has a sound structure. Cosmetic repairs are relatively inexpensive, especially if you're handy, and turnaround can be quick. Problems set in if you're forced to make extensive - or expensive - repairs or if you run into problems with zoning regulations and building permits.
Since rents are usually up to twice the cost of a mortgage payment, buying a home and renting it out can provide you with a steady passive income every month. Everyone needs a place to live, right? However, problems can set in if you have high repair and maintenance costs. If you don't have the time or experience to screen tenants, you could end up with unqualified renters who don't pay or shelling out a percentage of your profit to a property manager. You may also incur legal fees if you have to evict.
The keys to doing well with an investment property are having an investment plan beforehand and getting a home that's in the best possible shape at the lowest possible price. An exclusive buyer's agent who has experience with selling income properties can be an invaluable guide. Always have a plan going forward and interview several agents to find one who has the knowledge and experience to help you negotiate a good deal.
How to Invest in Real Estate
How to Make Money In Real Estate: A Beginner’s Guide to Investing