Property flipping has become a popular strategy for investment purpose. It is also a high risk strategy, but the rewards are worth it when the flip goes well.
This will all fall down to whether you are in a position to take the chance as house flips are 50-50 of ability and luck. There is one principle that you will have to abide which is buy low, sell high. There are 3 types of properties that you can flip.
New Development Properties
As the obvious states, you are to buy a property from a developer. You can make a profit out of the purchased property if it is done in the right way. Normally, you are able to get the properties below market prices from the developer itself.
You can sell it off to the secondary market once the property is completed because the price of the property might have already increased in value.
Fixer Uppers
Fixer uppers are rundown properties that require renovation. These kind of properties can be bought at an affordable price. However, you should bear in mind of the renovation cost that might take away your profit in the future.
You have to know some knowledge regarding home improvement when dealing with fixer uppers.
Foreclosed/Auctioned Properties
These properties are repossessed by banks due to the inability in paying the mortgage of previous owners. Remodeling of the house may be required because the owner of the house may have not have the monetary aspect to maintain the house.
Set a budget for how much you are prepared to spend to get this property but if the price gets too high, it might be the better choice to forget about it and look for other properties.
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