The cons of house flipping

Although flipping houses can seem like a quick and lucrative way to invest, it’s not without risk. Here are some things to consider…

Flipping can be risky. Large amounts of capital are tied to the purchase and there’s pressure to relist the house quickly. This may lead to mistakes that could be costly – such as paying too much for a property or renovating it incorrectly.

Flipping properties is competitive! In order to be successful, investors need to find houses either below market value OR with tremendous potential to be updated. Hundreds of other investors are also searching for the same thing, which can ultimately drive up prices.

Flipping can be stressful and time-consuming. It’s a fast-paced project with several deadlines and moving parts. Many investors find the prospect of flipping to be too overwhelming for their lifestyle.

House flipping relies on finding the right contractors. Investors who choose to rehab and resell houses must find reputable contractors who understand renovations, pricing, and project management. Hiring the wrong contractors can lead to bad renovation decisions, wasted time, overspending, and, potentially, zero profit.