Flipping a house is a common practice among DIY enthusiasts and those wanting to make a quick profit in a hot housing market. Flipping land is also another way to improve and sell an existing property by investing your own time and money. While both options share similar benefits, they are better for some situations than others.
Here is a basic rundown of the major differences between flipping a house and flipping land:
Convenience
One of the greatest advantages of flipping land is that it rarely requires a property visit. You can find eligible vacant property all over the country from the convenience of your own home without needing to travel. Most successful land-flippers use search engines and other internet resources to find good deals.
Flipping houses generally limits you to a specific geographic location. This means a smaller pool of potential properties. Also, buying and selling a house, regardless of its condition, requires visiting in person or via proxy. You can still use the same convenient techniques, but you will spend more time on logistics.
Profit
Flipping land and flipping houses both come with large potential ROI (return on investment). However, flipping land yields a bigger profit because the purchase prices are so much lower. Vacant and undeveloped land sells for much less than land with existing structures, especially in less heavily populated areas.
Your renovation costs and profits for any flip will depend on many factors. However, with a lower overall up-front cost, land flipping yields a higher ROI.
Income Stream Potential
Making money by flipping property doesn’t end at the sale. Both flipping houses and undeveloped land have the potential to generate ongoing income through seller financing and working with lenders. If you buy land for cash and then sell it with terms, you can collect monthly payments for years. The same goes for houses both for renting or selling. While the costs going into them may differ, both flipping options have equal opportunities for generating ongoing income long after the sale.
Is flipping land or flipping houses right for you? Consider these three points of comparison when doing your research to make the best decision for your situation.
About the Author
Debbie Caldwell
When you first meet Debbie Harris-Caldwell, you are immediately drawn to her charming Welsh accent and the twinkle in her eye. The well-traveled transplant from Wales is quick to set you at ease and time spent with her promises to be time well spent.
Debbie has been a real estate agent for 40 years and takes great pride in her customer service skills. "I make myself available to my customers when they need me, whether it's on a Sunday Evening or after their long day at work. I make my schedule fit theirs. I also keep my customers updated on everything happening with their listings or purchase, I am their conduit for information." She has built a business following her key principles of clear communication, attention to detail, client advocacy, and comprehensive knowledge of the area. Debbie comes to every new transaction with positive energy, determination, a strong understanding of the currents driving the market, and the expertise that comes from a lifetime of experience. She knows the importance of marketing and whether a home is for sale for $200,000 or for $2 million, she always has professional photography done and creates a listing presentation that best shows off her customer's home.