How would it sound to you if you could purchase a property at a low cost, and then turn around and sell it for a profit? If this sounds like the best idea you've heard in a long time, then you may enjoy what is now referred to as "house flipping". Beware, though, for as good as it sounds, if you aren't prepared to do it correctly, you can end up with no house and no profits! Let's take a closer look at this phenomenon known as house flipping.

When purchasing a house to flip, you want to look for the worst looking house, in a good neighborhood, that is serviced by a good school. The purchase price of the house should be low enough that you can make the necessary renovations and still be able to sell it at a money making price. The key factor will be, how much do you want or need to put into this house, and what renovations will yield the biggest paybacks?

A rule of thumb is if your house is over twenty-five years old, then you probably need a complete redo. If your house is under twenty-five years old, then you probably can get away with minor renovations. Some renovations will provide more of a return than others and, in making renovations; you don't want to price yourself out of a sale. You want to keep the price of your renovated house within a 15-20% range of the neighboring houses. People are willing to pay more money for improvements, but there will be a limit as to what people will spend in comparison to other houses in the area.

Today, bathrooms and kitchens provide the biggest return on your dollar. Kitchen upgrades can be as elaborate as dual sinks, granite countertops, and new cabinets, cooking stations and warming ovens. Keep in mind, the quality of the home. If your home is of moderate value, tile or laminate will do, as well as under cabinet lighting and new cabinet hardware. Improvements to bathrooms can include sunken tubs, glass window blocks and skylights. A moderate priced house will do well with a fresh coat of paint and new flooring. Other areas that will add value are bathroom suites, extra baths and half baths.

Renovations to increase the value of your house do not necessary have to be costly, or involved. Curb appeal can definitely result in a return on your investment. Painting the exterior, landscaping and yard maintenance will draw the buyer to want to see the inside. Some simple fixes on the interior, such as, patching cracks, painting; new lighting, new plumbing and redoing floor covering may be just what you need to make the customer feel drawn to this house. Wood floors are a popular choice today, and would be a good choice over carpeting. Also reduce clutter, to make the house look larger and more inviting. You can also create an extra room, by revamping extra areas. For example, turn a basement into a family room or extra bedroom, or turn a junk room into a den.

There are many things you can do to a house to increase its value and result in a profitable flip. Keep in mind; this is a financially risky investment. Sometimes, you may uncover some hidden damages, which may result in costly repair. By doing most of the work yourself, you can keep your out of pocket expenses down, but realize what you are and are not capable of doing. Remember, the market will play a determining factor in your profit. With all this in mind, happy flipping.