What does the term "fix and flip" refer to in real estate?

The term "fix and flip" specifically refers to the strategy of acquiring a property, making renovations or improvements to enhance its value, and then selling it at a higher price for profit. This approach is commonly used by real estate investors who seek to capitalize on undervalued properties or those that require updates to appeal to buyers.

In the context of the real estate market, fix and flip strategies can be advantageous as they can yield substantial returns on investment, particularly when the renovations are well-planned and executed. Investors often target properties that are in disrepair or need cosmetic upgrades, as these homes can typically be purchased at a lower cost, allowing for significant profit after the improvements.

The other options represent different real estate concepts. Leasing a property for a short term does not involve renovations and is more about the rental market. Negotiating a lower purchase price after an inspection is a standard practice in real estate transactions but does not imply any renovation efforts or resale aspect. Building a new home on previously purchased land reflects a different investment strategy, focusing on new construction rather than the buying, fixing, and reselling cycle. Thus, the definition of "fix and flip" aligns solely with the process of buying, renovating, and reselling a property for profit.