Have you ever noticed that when you’re asked to call heads or tails during a coin flip, there is one response you always lean toward? Personally, I almost always call heads. It’s not that there’s anything inherently better about the head side of the coin versus the tail side — they’re quite literally two sides of the same coin, but even so, heads is my call of choice.

In the same way, house flipping and rental real estate investing are two sides of the same coin. They’re both forms of property investment that can earn you excellent returns, but some investors prefer one while some investors prefer the other. Neither option is necessarily better than the other, but they both have their own sets of pros and cons that make them more suitable to different types of investors.

Pros of Fix and Flip Investing

House flipping is a fast-paced game that allows investors to earn major profits in minimal amounts of time. Many investors are drawn to house flipping because it is competitive in nature and requires agility, creativity, and fast action. Last year in California, fix and flip investors made an average gross profit of nearly $100,000 per flip. Needless to say, there is a great deal of money that can be made in the fix and flip market if investors have the necessary financing, detailed research, and talented contractors necessary to succeed.

Pros of Investing in Rental Real Estate

Investing in rental properties can be a more passive endeavor. Simply by purchasing a rental property and finding tenants, a rental real estate investor can earn income every month in addition to the final ROI they’ll earn when they resell their property a few years down the line. Rental real estate investors can invest in multiple properties at once and use a property management firm to look after their investments while they rake in the cash. There’s much less competition to face in rental real estate investment, and it can be a low stress endeavor that brings in extra cash while you do other work or even while you enjoy your retirement.

Cons of Fix and Flip Investing

For some people, fix and flip investing can be too high risk and too high stress. Time is money when it comes to house flipping, so if you’re not up to the demands of strict timelines and an ultracompetitive environment, you might prefer rental real estate investing.

Cons of Rental Real Estate Investing

Investing in rental real estate is a long-term endeavor. It takes much longer to see substantial returns on your investment in rental real estate versus fix and flip. Additionally, if you’re not interested in dealing with tenants, hiring a property management firm will eat into your profits. If you’re looking for a property investment with faster returns, fix and flip investing is probably the way to go.

Again, both these forms of investment offer opportunities for substantial ROI. Which path you take simply depends on your personality and which type of work you prefer. Thankfully, no matter what type of investor you are, the market is currently primed for both types of real estate investment. So however you choose to invest, do it sooner than later.