Flipping real estate

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					                               Flipping real estate

The term ‘flipping’ denotes the purchase of a revenue generating asset and
reselling it immediately (flipping) for profit. The asset here may even be real
estate or IFOs (Initial Public Offerings).

The only thing in the world whose value continues to rise (and sadly it cannot be
manufactured) is that of land. One can never really have enough of it. Flipping
real estate is an excellent means of quick income in areas with high land value.
The profit from flipping real estate is either obtained from buying cheap and
selling high, or buying a piece of property and fixing it up before selling it. The ‘fix
and flip’ procedure is comparatively a long-term investment requiring careful
planning. The buyer has to research the land value, market trends, repair costs
and resell value. The investor will probably buy a dilapidated house at a throw-
away price (often much lower than the actual value). The ‘throw-away’ price
arises from different conditions, and the investors look for them—major
renovations, relocation or pending foreclosure of the owner etc). The buyer will
then renovate and repair the house and sell it rather quickly closer to the market
value of new houses, thereby making a substantial profit.

However, flipping is also considered a criminal offence sometimes. Flipping
property illegally is considered a scheme where a person commits fraud to make
profit—a property bought low is sold at a substantial profit by inflating its value
artificially. As formerly said, the property is sold off in a relatively short time
period. Almost all the times the repairs and renovations are only cosmetic in
nature. So the ultimate buyer may be duped in such cases.

But, in some scenarios the house, after renovation, is in better condition and lasts
longer. Thus, it can be sold at much higher price later as land and property value
generally go up and rarely down. There is another important advantage. An
overlooked and unkempt area attracts anti-social elements thereby driving out
persons living responsibly, which in turn attracts more of the former. This
continues to degrade the locality. However, a mass renovation generates local
jobs and increased sales for local vendors. The rejuvenated homes will usher new
populations and boost the local economic growth. In addition the newly developed
homes acquire higher asset values thereby bringing more property tax revenues.
This is especially beneficial to the local governing bodies to do more renovating

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