Real Estate Flipping: The Pros and Cons of Buying a Flipped House

What Is a Flipped House?

When someone flips a house, they buy it for the express purpose of remodeling it and selling it. People who flip houses do not intend to live there permanently, and sometimes do not live there at all. They might even be flipping multiple houses at a time to turn a profit. Usually, flippers invest in fixer uppers or dated homes that need cosmetic repairs.

The Pros of Buying a Flipped House

With a flipped house, you know that you are purchasing a newly renovated home. Your flipped home will probably have new appliances, a modern look, and be move-in ready. You won’t need to touch up paint or do any of your own renovations before you move in.

Additionally, if you purchase a home from someone who is in the flipping business, they want to sell the home fast to turn a profit. This means that the flipped house will probably be competitively priced for the market, and the investor won’t want to carry the monthly costs of the home for long after the renovations are completed.

The Cons of Buying a Flipped House

When it comes to buying a flipped home, remember: flippers flip houses to make money. This means two things: first, you will be paying more for the renovations than the flippers paid. If they sold the house for what they paid for it plus the cost of the repairs, they would not make any money.

Next, the longer a flipper holds onto a house, the more money they lose in the monthly costs of the home like the mortgage payment and taxes. This means that sometimes, repairs can be rushed. When the flipper is only making cosmetic changes, this could not be a problem. However, if a flipper uncovers deeper structural problems, they might cover them up to make sure they still make a profit.

Protecting Yourself When Buying a Flipped House

When buying a flipped house, you need to be extra cautious. Look at all of the details of the home, make sure that everything is permitted, and ask your real estate agent and inspector for advice. 

When considering buying a flipped home, remember that flippers are in the business to make a profit. While there are some benefits to flipped homes, be wary of rushed repairs or shoddy workmanship.