If you’re interested in property and the housing market then you need to know about house flipping. There are, of course, two different ways you can flip a house, one involves some elbow grease or cash, and the other is buying at the right time. The first kind is when you purchase a somewhat outdated house, make the necessary repairs and updates, and then sell the property on for increased value. The second kind is a little more risky as you need to judge how the housing market is going to affect the property you’re buying. You purchase a home, hold onto it for a few months, and then sell it at a, hopefully, higher price.
Financing the house
Of course, house flipping can be a great way to earn you money, if appropriately considered and done carefully. It’s important to know that there are very few people who will recommend using finance money to flip a house, as you will have to sell the house for much more money simply to break-even with the loan and interest. This is ultimately a venture for people who can buy a home with cash, otherwise the profit margin is slim.
Get the right location
Almost as important as finding the money to finance the project is choosing the right location. You will need to do some local research into the housing market around you. You’re aiming at looking into investment opportunities, so you’ll need to make sure you avoid any saturated markets. If you can identify an area that is steadily up and coming, then you ideally want to invest in a neighborhood like that. Alternatively, don’t get somewhere that’s not going to help any increase in value for your home.
It’s all about structure
While you’re probably preparing to overhaul the property totally, there are a few things you want to make sure you don’t have to touch. One of those things is the property’s structure. Ideally, you want to make sure the house doesn’t have anything wrong with the structure. Not to mention any issues with damp and mold. You don’t want expensive setbacks ruining the whole renovation project.
Checking the market value
Anyone selling the home is likely wanting to make a profit even despite it not being worth that much. What you need to do is make sure the house you’re buying is beneath the local market value of homes around the area. If you find a run-down home in a great neighborhood, then you’re winning. You then have the tough job of ensuring that you don’t make the house worth too much in comparison to surrounding homes, or you’re going to struggle to shift it.
While it might be tempting to either totally do it yourself, or just to bring in a load of people and pay them the money, a healthy mix tends to do the job well. Identify the jobs you know you can do yourself to save on money and then hand over the tougher, more specialized responsibilities to someone who knows their stuff. Spend time finding top-notch and fair general contractors, as they’re the ones who’ll be doing most of the physical labor, so you need to trust them.
Get a good realtor
Sure, you can probably sell the house yourself, and if you’re confident enough you can give it a go. However, realtors are there for a reason, and it’s what they do best. They will list your home everywhere they can and have inside knowledge into how the market is doing. A realtor could be the difference between your house selling and staying on the market.
No doubt, house flipping is a tough business, but with enough savvy, it’s a great way of making good money.