Flipping houses have become one of the best things to do in real estate. It is one of the most popular ways to invest in real estate, even many beginners are doing it. But should you flip houses now? And what should you know before flipping houses?
It is without a doubt that flipping houses have brought a lot of profit – more than decades ago. So it’s not a surprise that more and more people are doing it. But just like any other kind of investment in real estate, no one should go in blind. Flipping houses may sound simple, but one wrong move, and you could lose a lot of money.
1. Choose the best location
You may have heard this a lot before. Location is a crucial factor when buying a property. It doesn’t matter you’re intending to stay in the new property or sell it later, a great location is critical. Expert house flippers will agree with this statement too. Finding a home in a desirable neighborhood is what many people are doing, therefore buyers are going to be interested in buying your property.
Start by researching local neighborhoods and cities. Look for areas with increasing real estate values, employment growth, great public services, and many other indications that the town is thriving and safe. Stay away from shady neighborhoods that carry a lot of risks.
Neighborhoods with high crime rates should be avoided as well. Homes located in this kind of neighborhood can be a pain to sell. Everything that you’ve put into the house could be up in flames too.
2. Check the house thoroughly
When buying a house, make sure you check it thoroughly. You don’t want to find any surprises later that may be lurking just below the surface. I am talking about surprises like black mold, cracked foundation, termite infestation, and other problems.
Always look for homes that are structurally sound. It can be trickier when you’re considering buying an older home. And another problem may arise when you’re buying a home at a real estate auction, as you may not be able to have the home inspected. This may be the most difficult part of being a house flipper but with more experience, you will learn what to look for or simply bring someone with you who are knowledgeable about building, plumbing, and electricity.
3. Be efficient with repairs
Repair costs determine how much profit you can get after selling the house. Naturally, the more efficient your repairs are the more profit you’re going to get. The key here is to know which parts of the house need repairs and which are not. If you repair only what is necessary, you can increase the value of the house without spending too much money and time.
Start by examining the house thoroughly and learn what people are looking for. Is there a certain aesthetic that is popular today? Or do people prefer a better kitchen, bedroom, or bathroom? Some ideas that you can are improving the lawn, fixing the plumbing, replacing the old kitchen appliances and cupboards, repainting the walls, fixing the window frames, and so on.
4. Buy a house at the right value
Buying a house below the market value is what every house flipper is aiming for. But it can be tricky and require a lot of luck. That being said, there are some things that you can do to make it happen. For example, buying the worst house in a great neighborhood. Doing that is much better than buying the best house in a dangerous neighborhood. Because the worst house is going to increase in value, while the best house is going down.
Another great tip is to always meet the homeowner when buying a house. Looking at the photos online isn’t enough, so you must visit the location directly and meet with the homeowner to get the whole picture. By doing this, you can determine whether the house is over or under the market value.
Flipping houses can be exciting and fun, but tricky and daunting at the same time. There are just so many that you need to think about before pulling the trigger. You have to be efficient with how you spend your capital on.