How is Flipping Houses Morally Superior to Flipping Stocks?:- Real estate investing provides more to the local community and the overall economy than any other form of buying and selling assets for a profit.  There is certainly no shortage of those trying to cash in from flipping stocks,Flipping Real Estate baseball cards, even fine art to make a buck.  But flipping properties reinvigorates entire communities and establishes needed levels for an asset value, which the others simply do not.

When a property is flipped for a profit, the entire neighborhood benefits.  The mere act of buying and preparing a house, condo, or small apartment building to be flipped betters the local area.  The property is fixed up to become as appealing as possible to potential buyers.  The new homeowners move in with a "pride of ownership" that improves the block for all.  By contrast, a stock is flipped for a profit without improving the company, at all.

After being fixed up, the flipped property is then sold for a profit.  That lifts the value of all the real estate in the area.  This is important for raising the worth of the largest asset for most American families to what the market value should be without the run-down house down the street dragging down prices.  Flipping houses establishes an accurate value for homes in an area, which is an important function in the free market as it signals the overall healthy for an asset class.  When a stock is bought and sold quickly, it does not lift the value of the other companies in its sector.  That act with stock does not perform any market service either for determining the accurate value of an asset.

These differences in service to the local community and the overall economy result from the fundamental differences in the styles of those buying and selling these assets.

One of the greatest investors in history, Benjamin Graham, the father of the Value School of Investing and the mentor for Warren Buffett, described a speculator as one who seeks to profit from the conditions of the market.  That has nothing to do with the value of the publicly traded company, rather how a financial exchange is valuing its shares.  An investor, by contrast, according to Graham, seeks to profit from the business conditions of the company.  Buyers are looking to gain from the potential of the company's future stream of income, the basis of all investing.

As such, speculators are little more than gamblers.  Stocks are bought and sold, hoping for a gain based on the market moving in the right direction, no matter what is going on at the company.  Those purchasing real estate to be flipped, in comparison, are moving to profit based on the conditions of the house.  There is the intent to profit based on how the house is undervalued due to its condition, not a short term distortion in the market.  

That performs a long term service for the community is raising the prices to the most efficient level.  This is the basis for the functioning of a free market for any asset.  From that, the owners, not the speculators, will realize the benefits of their assets.