Flipper is one of the most famous competitions of the last few years, around which many myths and legends have arisen. On the one hand, flippers are perceived as clever entrepreneurs who skillfully and creatively transform “ordinary apartments” into exclusive apartments, and on the other, as cynical tricksters who take advantage of the difficult situation on the housing market, deepening the pathologies that plague it with their actions. In this article, we explain what this profession really is, what are its roots and how does the activity of flippers affect the housing economy?
Who is a flipper?
The term “flipper” refers to an entrepreneur-investor who buys a property that requires renovation on the secondary market or finishing (on the primary market) in order to then quickly sell it at a higher price. The idea is to obtain a short-term return on investment by increasing the value of the renovated property and selling it on the secondary market.
Flipper – the history
The first flippers appeared in the 1970s in the United States, when the local real estate market was experiencing dynamic development. Investors specializing in the housing market saw high potential in the quick process of purchase, renovation and quick resale of properties that were purchased in poor technical condition. Initially, it focused mainly on residential properties acquired from people with financial problems, the elderly, the sick or post-inheritance apartments where the inheritors had been staying in another region of the country for years.
In the 1980s and 1990s, flipping became more common and the practice evolved to include various types of properties – single-family homes and commercial properties. As the American real estate market matured, the practice of flipping also spread to European housing markets, where it became increasingly popular, especially in large cities and dynamically developing regions.
Ethical aspects of flipper activity
However, this type of activity has long been controversial. Critics of this type of activity point out that flippers focus on maximizing profits at the expense of the quality of renovations and the impact on the local community, where poorer residents are tempted by seemingly bargain offers of real estate sales. It also has a significant impact on the availability of housing for people with lower incomes and on the destabilization of local housing markets.
On the other hand, supporters of flipping argue that this activity can contribute to improving the technical condition of older properties and revitalizing neglected areas. Moreover, effective investing in real estate can generate financial benefits for investors and accelerate turnover on the housing market.
The impact of flippers on the housing market
Flippers have a significant impact on the housing market. On the one hand, they can contribute to increasing the supply of apartments by revitalizing and modernizing existing properties, but on the other, some people fear that the activities of flippers may lead to excessive speculation, increase in real estate prices and limit the availability of apartments for people with lower incomes.
It is worth emphasizing that the role of flippers in the housing economy is debatable, and the final impact of their activities depends on many factors, such as local market conditions, housing policy and ethical standards of investors’ activities.
