Are you looking at getting into the house flipping business? Some people make their living off of buying a cheap house, renovating it, and then selling for a profit. You likely see those people on television. They make it seem so easy, right?
Don’t kid yourself. House flipping can make you a decent amount of cash, but only if you know what you are doing. There’s a lot of research that you need to do ahead of time, along with budgeting and creativity. Flipping a house could be a unique way to earn a hefty paycheque, but it could also be a way to toss you into debt quickly.
So, do you want to make money by flipping a house? Read these tips before you begin.
Do You Know What You’re Doing?
Before you start anything, do you know how to flip a house? We’re not talking about slapping on a coat of paint and updating the light fixtures to sell for profit.
There are tons of factors that come into play when you’re in the house flipping business. If you don’t pay attention to those factors, it could end up costing you a lot of money. Read up on house flipping from those you know what they’re doing.
Research the Neighborhood
Before you sign anything, research the neighborhood of your potential property. If you bought a cheap house in an undesirable part of town, good luck making money off of it. There likely is a reason as to why it’s so cheap.
Take a look at everything that could affect the price of the home, as well as how quickly you can sell it. How much are other homes selling for? How long are they on the market before selling? What are the amenities in the neighborhood that boosts the property value? Are there things that decrease the property value?
Anything that will affect the price of your property should be taken into consideration. Otherwise, you could be in for a big surprise when you find out nothing in that area of town sells.
Purchase the Right Property for You
Now, depending on your skill level when it comes to renovations and decorations, you might be able to buy a house that is on the verge of falling down. However, if you have to hire contractors for almost everything to make that house livable, you might be biting off more than you can chew.
Spend some time inspecting the potential property. Take note of all the work you need to do, as well as any work you need to outsource. You could throw away a massive chunk of your profit by paying all the contractors necessary to complete the job.
When you flip a house, the less amount of surprises you have to deal with, the better it will be. Typically, a surprise when renovating a house means spending money. So, by doing a thorough check of the house to ensure your skills are up to par for the flip, the less of a chance a surprise will come.
One way to cut into your profits is by having the property sit on the market for too long. For every month that a house is for sale, it will cost you money. So, the quicker you can sell it, the better off you will be.
If you did your research, it shouldn’t be hard to sell the house fairly quickly. However, if there is no movement happening, it will require a bit of work on your end.
Spruce up the curb appeal of the property. The first impression of a home is critical for a buyer. You want to draw them through the front doors. Stage the house in a way that is welcoming to visitors and shows off all the features you’ve added. Remember, the goal is to get a sale as quickly as possible.