Flipping is an investment strategy where a property is purchased at a low price, renovated, and sold for a higher price. Of course, it’s more complicated. For successful flipping, it is important to take into account the potential of the apartment: the convenience of location, the presence of social facilities, the amount of renovation work, and the amount of investment.
Pros of Flipping
Flipping has many advantages over other real estate investment options. First of all, those who want to increase their capital pay attention to more promising forecasts for making a profit. These and other benefits are listed below:
High profitability. As mentioned above, for successful flipping you need to be careful when choosing an apartment. If you follow all the rules, you can get from 20 to 50 percent plus of the invested amount.
Speed. Flipping is considered a short-term investment strategy because it takes a long time to sell an object – it is risky due to floating market prices. The optimal period is 3-4 months from purchase to sale.
Annual turnover Only 3-4 apartments can be sold per year, making this strategy more limited than others.
Value. For a successful sale, the flipper must create an attractive and comfortable property in a desirable location, thereby enhancing living conditions for buyers.
Safety. When purchasing real estate, an investor can obtain title insurance to prevent fraud or claims made by the former owner’s relatives.
Flipping is one of the most exciting real estate strategies. When an investor evaluates a promising apartment, searching for a new property becomes a game of chance to find the “golden sand” quickly. For other entrepreneurs, the most interesting thing about flipping is its implementation in interior design. In this case, each object becomes a creative project, with the buyers investing their vision and sense of style.
Cons of Flipping
At the first stage of getting to know flipping, it will take more time and effort than other strategies. To get maximum profit in a short time and enjoy investing, you will have to be patient and deal with several features:
Active participation. For flipping to become truly profitable, you need to devote time to analyzing the market, searching for objects, drawing up design projects, and monitoring renovation work. A possible solution would be to delegate these processes, but it is better to understand the theory yourself first.
Significant entry threshold. At first, it may seem that flipping is one of the most cost-effective strategies, but you also need to consider the investment in renovations. Another nuance: these investments should be real capital, not credit. This will protect you from possible debts that may arise due to the risks of flipping.
Speed is important. The amount of profit directly depends on how quickly you put the restored object on sale. Inflation, economic instability, the dollar exchange rate – all this can put pressure and cause tension.
Bureaucratic delays. This disadvantage applies to any strategy related to housing, but tedious and lengthy work with documents for someone can be a decisive factor in making a decision.
The essence of flipping is not only to buy an inexpensive apartment in a good location but also to create from it a beautiful and valuable property that will suit the majority of potential buyers. To do this you need to make a global renovation.
First of all, pay attention to neutral, light colors in the interior. This makes the room visually more spacious and will appeal to almost everyone.
To add value to the property, we advise you to equip it with the most necessary set of furniture and equipment. A renovated apartment with new appliances solves many problems. Aerobatics is to stylishly decorate the apartment with cozy interior items: blankets, candles, pillows, and so on. Housing in the “move in and live” format, which will immediately make the buyer fall in love with it, can bring maximum profitability.
