Real estate prices continue to go up, and there are not a lot of properties on the market. As a result, it is harder to flip a house right now than it has been in the past, but the possible reward is very high.
If you are ready to invest time into the process, you can make a lot of money. However, you have to think logically about your purchase and try to keep your emotions out of it. Television shows that glamorize flipping often give people an inaccurate impression of what the process is like. It is not easy, and you must be prepared going in.
- Crunch The Numbers
First, make sure you understand how much money you have to spend, both on the property and on the renovations. Think through what you are willing to risk. There are so many things to think about, including how much money utilities, taxes, and even maintenance on the property will cost you. Figure out what you need to spend on labor and materials. Look for other homes like yours in the area to determine what you can sell the property for. Don’t anticipate getting more than that for the house. After you have crunched all the numbers and you have a realistic plan, start looking for a house that meets your criteria. Stay logical throughout the process and don’t be tempted by a home that doesn’t fit into your plan.
- Know The Area
What is the area like? Are prices going up? Is the area not yet established but looks like it could be on the rise? What are the schools like? Will families want to send their children to them? What will retirees think of the area? When you are familiar with the area you are buying in, you are more likely to make a smart home purchase. It is also easier for you to figure out how much money you stand to make on the property. There is always a price cap in any given neighborhood. Make sure you understand that before your decision to flip a house. Look at what has sold recently and how long those properties have been on the market. That information can help you determine the path you want to take during your flip. For example, you may want to rent the home first, before you sell it, to give the neighborhood time to get noticed.
- Understand Your Target Buyer
If you purchased in an area with great schools, your home is probably going to appeal to families. Make sure you have a nice living area where these individuals can hang out. Also, bathrooms are important. Spend some money renovating these areas and make sure they are suitable for families. If there is a basement, finish it so that there is an additional living area. The master bedroom is not as important, although there should be a master bath. If you purchased in an area that appeals to retirees, hopefully the home is just one level. If there is a staircase, make it as big and easy to navigate as possible. The halls should be wide as well. Finally, put a patio in the backyard. This will still allow the owners to enjoy an outdoor space without making them spend a lot of time on maintenance. If you’d like to know more then check this piece out on how to flip a house.
- Be Honest
If you fix or replace something in the house, let the buyer know what you did. Take pictures of the repairs and write down everything that took place. If you install new appliances or other products, keep the warranties and instruction manuals so that you can pass them on to the new owner. Make sure that the buyer understands the property’s history and give them the tools they need to live comfortably.
- Set The Right Price
It is natural to want to make as much money as possible from your renovation. However, the buyer doesn’t know everything you have done to change the property. They don’t understand how hard the flip was on you. They are looking at the house as is, and you need to make sure that the price is right. In general, it is better to set the price just a little low so that you sell fast.
The benefits when you flip a house will far outweigh the costs and headaches if you follow these basic guidelines.