Investments in real
estate have always been
a fairly safe way to
invest your money.
Recently there has been
an increase in people
buying real estate
solely for the purpose
of improving the home
and then turning around
and reselling the home
hopefully at a profit.
This type of investing
in real estate however
is not nearly as safe
and depending on the
outcome could bring a
great profit, little
profit or put your bank
account in the red.
Due to the popularity of
buying, improving and
reselling real estate in
recent years there is
even a slang term, which
refers to this practice
called "Flipping".
Flipping is used due to
the fact that you are
buying a home improving
on in some ways and
selling it at a higher
cost then you bought it
for and invested into it,
therefore flipping.
If done correctly buying
and selling real estate
can turn a great profit
but there are a few key
points to keep in mind
should you decide to
invest in this practice.
First of all it is
important to thoroughly
inspect the prospective
home and property.
Looking for resale value
is the best way to
determine whether you
will be able to invest
enough to sell the
property at a profit or
if you will have to take
a loss.
Determining neighborhood
property and home values
is a great place to
start, finding out the
minimum and maximums the
general public will be
willing to pay for your
real estate. For
instance, if you
purchase the house and
land for a low cost
compared to the other
places in the
neighborhood may look
like a deal, however you
still have to consider
the amount of money you
will need to invest to
resell the home at a
higher value. If you are
going to have to make a
lot of improvements to
sell at a comparable
price for that specific
neighborhood the
property may not be
worth the time, energy
and funds needed.
Additionally it will be
difficult to have a
profit from a real
estate such as that.
Another important key
point to keep in mind
with real estate is the
amount you will need to
invest in order to
improve and update the
property that will make
people want to purchase
it. If you will need to
do major renovations at
a high cost your profit
margin will slowly seep
away. However if you
only need to update the
home enough that there
will be more appeal it
may be a great
investment. Updating a
home can raise the
market value quickly
with little cost to you.
This will appeal to
buyers and you will be
more likely to resell
the property at a
profit.
Buying and selling real
estate is a risky
business that takes
great time, energy and
investment of funds.
With careful
consideration and
evaluation you can find
the property that will
eventually be sold at a
profit.
