What is “flipping” in real estate?

“Flipping” in real estate refers to the practice of purchasing properties, often in need of repairs or updates, making renovations or improvements to those properties, and then selling them in a relatively short timeframe for a profit. This approach can generate quick returns on investment, as the goal is to improve the property’s market value through renovations and then capitalize on that increase by selling it at a higher price.

In contrast, buying properties to rent them long-term focuses more on generating ongoing rental income rather than quick sales. Holding properties for appreciation involves a long-term strategy where an investor waits for property values to increase over several years, rather than seeking immediate profit through renovation and resale. Additionally, buying properties at auctions without renovation does not align with the flipping concept, as flipping inherently involves adding value through renovations before selling. Therefore, the practice of flipping is characterized specifically by a rapid purchase-renovation-sale cycle aimed at profit.