If you’re interested in earning money through real estate investments, you may be familiar with the concept of property flipping. This is a straightforward process which can be remarkably profitable for a savvy investor with the right kind of information.
What Is a Flip?
Put simply, property flips occur when an investor purchases a piece of real estate, holds it for a period of time, and then sells, or “flips,” it. It may or may not be a profitable endeavor. Values do go down sometimes. Property flipping can happen in a number of ways. First, the investor may find a property that he knows to be undervalued. He can, in these cases, simply swoop in and buy it at a “bargain” and then turn around and sell the property for its true value. If this occurs, the investor probably had an information advantage.
The second way to successfully execute a property flip is through repairs and renovations. An investor buys a property in need of some work. While the investor owns the property, he fixes the house and may update some aesthetics. This makes the house more attractive for potential buyers and increases its appeal. Of course, the investor must be able to make a profit aftersubtracting his costs for repairs from the new selling price.
The third way to flip a property takes time and capital. This entails buying a piece of land in an area that is rapidly appreciating. The investor simply purchases the property, waits until he believes its market value is as high as it will go, and then sells the house for a profit. This can be a bit like playing the stock market, as one never knows when market values will change. There are other iterations of these investment options, but they take time to understand, as real estate investing is a complex business. Now, however, you can access a more sophisticated analysis of these issues by using our HomeSmart Report and HomeSmart Value Report. These reports provide essential information for any real estate investor who is considering a property flip.