Flipping Property as a Real Estate Investment

There are a number of different methods an individual can employ in order to turn a profit in real estate investing and one of the most common is what is known as flipping a property. For those not familiar with what this term refers it means that one purchases a property at a low price and then quickly sells the property at a higher price. Usually, this is done by way of repairing or adding to the property so as to increase its value. For example, if one purchases a home that has a roof in disrepair and then fixes the roof the equity of the home might modestly (or dramatically) increase. The property is quickly sold – aka flipped – and the increased equity is collected as profit. Does this sound easy? Well, in a way it is but it is definitely not a process that comes without risk.

Case in point, if a the property deemed to be “flipped” turns out to require more repair work than what was previously expected or if there are other issues to contend with such as declining real estate value then the property might even turn out to be a money loser for the investor. Granted, tax write offs may make the venture salvageable but this was not the original intention. If there was any advice that could be offered here it would be approach flipping a property conservatively and not try and make a “killing” by attempting to flip a large volume of property. Start slow, take it easy and then let business develop from there.