Financing Rentals

The Pros and Cons of Flipping Houses

Before deciding to flip houses, there are some things you should know.

flipping houses

When it comes to getting involved in real estate, there are many avenues you can take. Two of the most popular are flipping houses, and rental properties. These two options are similar in that they both require purchasing a home, but whereas rental properties are more long-term and provide passive income, flipping houses are more short-term solutions that can result in instant money.

While there are definitely pros and cons to both, for this article we are focusing on flipping houses, a career path that has ultimately been made more popular by HGTV. So if you have ever considered it, or are thinking about getting into the house flipping game, there are some pros and cons that you should definitely take into consideration.


There is a lot of money in flipping houses, and if you are good at it (and a little lucky), you will receive large chunks of cash every time you sell. Obviously the more flips you have going at any given time, the more often these windfalls will hit your account.

Flipping houses are a lot less hassle in the long term, than rental properties, since you don’t have to worry about managing or maintaining a flip after it is sold.

Buying and renovating homes can give you a crash course in all kinds of subjects, from construction, to real estate trends, to interior design, which will only help you in future endeavors.

READ MORE: Five Expert Tips on Flipping Houses

Flipping houses is something you can do in your spare time, if you have a day job that offers you a lot of free time. This is especially handy if you aren’t doing all the work yourself, and can take on multiple homes at a time.

When you flip houses, you are in constant contact with all kinds of new people, from vendors, to contractors, to attorneys and realtors. It’s never a bad thing to increase your network, and flipping houses is a great way to do that.


Flipping houses is a risk. Even if you spend all your time renovating a beautiful home, there is really no guarantee it will sell in a timely manner, which may lead to price cuts, or having to sell for less than you paid, and actually losing money.

House flippers are basically considered self-employed, so they are required to pay roughly 15% more in taxes.

Flipping houses requires active participation and involvement, whereas renting properties will give you regular income. So you should only flip houses if you aren’t afraid to get your hands dirty.

Stress is never a good thing, and house flippers deal with more high-stress situations than normal, from contractors being late, to deals that fall through at the last minute. It’s important to take things in stride in the flipping business, for sure.

Flipping houses (at least at first) typically requires you to get a mortgage, so you will probably need to have a job, or a lot of collateral in order to get that first loan, the latter of which can be risky.

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About the author

Gary Adrian Randall


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