For taxation reasons, renovating and selling a low-priced apartment may be more profitable than renting it out. Real-estate investors are not able to deduct expenses for apartment renovations that took place before the start of a lease. This is why many skilled investors flip apartments to finance the acquisition of new rental apartments.
The profitability of flipping is based on relatively low purchase prices and on the renovation providing value that clearly exceeds that of the renovation expenses. However, the state of the housing company and any upcoming renovations should be taken into account, too. If the low price is partly due to upcoming housing company renovations, the apartment renovation may not necessarily increase its sale price, and finding a buyer may be difficult.
Consider your potential buyers when planning a renovation. For instance, if you use unusual materials or colors, this may limit the number of buyers. Also, if you choose to use only the finest materials, it may prove difficult to justify the price hike to most buyers. Regardless, you should always focus on quality and work meticulously. Remember also to account for the time you have spent on the renovation.