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3 pros and cons of flipping property

In our previous post, we shared with you tips on flipping property. Well, it would not be wise for us to live it at that. As an investor in real estate looking to grow your finances through such a profit making venture, it is important to know that property flipping comes with a number of pros and cons.

Property flipping falls under the category of high risk, high reward investments. Just as you are likely to make a financial kill, you are equally at risk of losing it all. So before you decide to put your money in such a venture, let’s first look at the 3 main pros and cons.


The pros of property flipping

Let’s get right into it.


#1 There is a huge potential to make a veryquick profit

Property flipping is a quick money game. You get in quick and get out quick. If you get it right, you stand a chance of making some really good financial returns. That is what makes this a very attractive investment venture.


#2 You will gain valuable experience in real estate

When you decide to get into property flipping as an investment option, you are bound to gain a lot of valuable experience in the real estate sector. The idea is that you want to make your financial return quick so you invest a lot of time in learning all you can about construction, the local market, unanticipated costs and real estate in general. By the time you are done and you have flipped your property, your body of knowledge of the real estate industry will be tremendous.


#3 It is an opportunity to growyour network

When undertaking the venture of property flipping, you will end up creating very many new valuable contacts as this is not a venture you get into on you own, you have to work with others in the industry from realtors, building inspectors, insurance brokers, attorneys, contractors as well as other investors.


The cons of property flipping

Just as there are pros, there are also cons.


#1 The potential of losing money is high

This venture relies on everything going right therefore, if one or two things go wrong such as unanticipated expenses or change in the tax regime, you have the potential of taking a major financial hit.


#2 The property loses value pretty quickly

The major challenge with house flipping is that every day you are unable to find a buyer, the property loses value to increasing costs. As the owner, you have to pay holding costs therefore such costs eat into your potential returns thus making your property lose its value.


#3 House flipping is stressful

The process of house flipping is not for the faint hearted. The task of identifying and buying the right property, working with contractors, designers and realtors, and finally finding a buyer within the right time is a stressful period of time.

It is therefore upon you to weigh these pros and cons and decide whether it is all worth it.

We would love to hear your thoughts.

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