Flipping refers to purchasing an asset with a short holding period with the intent of selling it for a quick profit rather than holding on for long-term appreciation. It represents a classic investment technique in a lot of areas, including real estate, Initial Public Offerings (IPOs) or digital assets such as NFTs and tokens.
Most commonly associated with real estate investments, flipping is a short-term strategy that can often yield positive ROI simply due to asset appreciation. Buying an under-valued property at the right time (a market dip) and selling it after the price increases can be a surefire way of earning.
When applied to real estate, flipping properties may also involve some extra investment in order to make the property more attractive before reselling it. Therefore, in this scenario, the asset appreciation is derived not just from the market value change, but also from the extra work and funds invested in the property to renovate or expand it.
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