What's the newest fashion in Real Estate? Flipping Houses! Basically, it involves buying low and selling high to maximize profit. But before you decide to take the challenge, here are a few tips to make the risky more lucrative.
Know the Market. Real Estate can be affected by factors of the economy, interest rates and the time of year. Use the expertise of a Realtor, search classified ads, websites and bank foreclosures.
- Look for cosmetic-only repairs. Look for a "bad" house in a decent neighborhood. A home that needs some love and attention is an excellent consideration. Think reasonable updates. Avoid homes requiring costly structural repairs.
- Be prepared to do the work yourself. Plan to devote your time and resources for quick results. If you need a professional contractor, get the cost of repairs in writing. Supervise the work and document your project with pictures and record repairs, permits, paint colors, etc.
- Know the features that will sell a home quickly. Neutral color scheme, and updated kitchen and baths. Make sure you don't make such high-end updates that you can't recoup your money. Also take into consideration if the home is near schools and convenient shopping.
- Don't ignore curb appeal. To catch the eye of a potential buyer, make sure the exterior is clean and in good shape. A nice lawn with landscaping goes along way with presentation.
- Do not procrastinate if you want quick revenue! Time is money and the sooner you start renovations, the quicker you can get it on the market. Have your tools and materials ready and/or have your contractors scheduled to work with a reasonable time of completion.
- Make sure you have a realistic timeline and budget in mind BEFORE making the purchase. Determine your selling price ahead of time so there's minimal surprises. Remember purchase price, repair costs, Realtor commissions, taxes, insurance, and utilities to name a few. To help stay on track, plan well, stay organized and stay on schedule.
- Get a professional home inspection. Sometimes people decide they can give a good estimate themselves but in the long run it will cost them money. Professional inspectors provide an unbiased report on the overall structure and will evaluate any potential risks or hazards.
- Know your financing options. Unless you plan on paying cash, get pre-qualified and have that in place before you begin your search.
- Don't start with a high risk property. Take small steps and learn how to spot a bargain with profit potential. In the beginning plan to expect a 10-15% profit margin. This may seem modest, but it's considered a great success.
Lastly, if you need assistance deciding the potential of a home, get advice from a professional Home Stager.
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