Bricks and mortar property development is a global multi-billion dollar business. Ever since the first humans found caves, property ownership has been important. We can be sure that the early cavemen found a way of trading up their small caves to even larger ones for the appropriate number of animal skins.

We've all heard the stories of people who bought a run down house, invested some time, energy and cash in renovating it and then sold it on for a tidy profit.

Well, it's really no different in the online world. The only difference is that the real estate is in the form of websites.

Now, websites come in all shapes and sizes and they all have their own purpose. What matters to us is that we can find sites to buy and we can resell them at a profit.

We'll talk about the different ways of doing that in a moment.. 

The most basic form of site flipping is simply buying a website and then reselling it for a profit. The objective is to "Buy Low" and "Sell High". The profit usually comes from our ability to properly market the website. If you are new to website flipping, then this is a great starting point as the cost of entry is relatively low and the risk is minimal.

The next level up requires a bit more effort. It involves buying undervalued, un-loved, poorly maintained websites; investing in some "renovation work" and then selling them on for a profit. The best results come from sites that are under-monetized, where the current owner isn't realising the full profit potential. This isn't for the faint hearted, you need a certain level of skill, knowledge and experience to identify the "fixer upper" type sites and to develop those sites to generate good levels of profit.

Finally, we have the Portfolio Manager. At this level your primary objective is to build a portfolio of sites that generate a constant monthly profit for the minimum amount of effort. Here you will be primarily focusing on buying and building niche based membership sites with strong continuity and customer loyalty. The trick is to maintain levels of traffic and sales that sustain the growth of the membership above the level of attrition. Remember that you will only ever realize the true value of your portfolio when you sell it. So always have an exit strategy in mind!

Of course, one of the key indicators of a website's value is it's profitability. However, there are other factors that also add vlaue to a website and will impact upon the price at which you buy as well as the price you can achieve when selling.

1. The inherent value of the domain name
2. The value of any exclusive content on the site
3. The volume of traffic measured as unique visitors
4. The number of incoming links
5. The Page Rank (Measured by Google)

There are as many opinions on how to value a website as there are people who hold those opinions. There is no right or wrong valuation method. The most accurate measure is the value that you place upon a website when you wish to purchase it and the amount your buyer will actually pay when they buy it.

The best advice I can give you is to think about how much you believe that you can realistically sell a website for and then set a maximum purchase price that gives you enough room, after costs, to make a good return on your investment. Your investment includes the amount of time you spend on the entire purchasing and selling processes.

All the other factors are just numbers; and subjective numbers at that.

Although I've talked about buying unloved sites, renovating them and then selling them on for a profit, there are other site flipping methods.

One method is simply to create a brand new site and offer it for sale immediately. And, while these sites rarely fetch premium prices, it is possible to generate a reasonable amount of income when you create and sell sites in high demand niche topics.

One of my favourite site flipping methods is to buy products with Private Label Rights (PLR) that include the sales copy, graphics and associated files. It's then very easy to register a domain, set up the site, generate a few sales to make it profitable and then to sell the complete package on as a ready made site.

You can also build in a recurring income stream if you investing in a Reseller Hosting account. It's much easier to transfer a domain with hosting than to have to copy all the files to a new host.