What does "fix-and-flip" refer to in real estate investing?

The term "fix-and-flip" in real estate investing specifically refers to the strategy of buying properties, making improvements or renovations, and then reselling them for a profit. This method typically involves identifying distressed properties that can be acquired at a lower price. Investors will then invest time and resources into renovating these properties to enhance their market value.

The core of this strategy is to increase the property's worth through improvements, which may include cosmetic updates, structural repairs, or modernizing outdated features. Once the renovations are complete, the investor lists the property for sale at a higher price than the purchase and renovation costs combined. This approach can yield significant returns if executed properly, capitalizing on both the initial investment and the added value from renovations.

In contrast, renting out properties without any renovations focuses on generating steady income rather than on flipping the property for a quick profit. Purchasing land for long-term development and offering discounts on rental properties do not align with the fix-and-flip model, which is centered around short-term investments and quick turnaround through improvements and resale.