In an era where real estate is either a benefit or a burden to Americans, it is still possible for people to prosper from the practice of flipping a home. It may take a lot of work, or not in some cases, but for investors who are looking to put some work into the project, the results could be lucrative.
Flipping houses involves more than a paint job and laying some new flooring. There are several details to check before entering into the purchase of the investment home. These are both structural and aesthetic.
Location, location, location
The foundation of any good home investment purchase is the location. This is an age-old mantra, but very true. Is the area safe from crime? Is it family friendly? Is it close to amenities? Do the neighbors keep their homes in good condition? These will all be selling points in the future.
Is the house solid?
It is important to know if the house you have chosen is free from structural problems. If you are not experienced at looking for the telltale signs of wear, or worse, rot, it will be worth your time and money to hire a certified home inspector. Investing in a home that needs too many repairs is not wise, especially if you are planning to flip it in the coming months.
If you try to bypass this step, either by inspecting it yourself or hiring a professional, your potential buyers will have their own people inspect it, find the flaws and possibly move on to the next property.
Make a list – check it twice
When you have decided on a particular home as your next investment project, it is important to make a list of all the repairs and/or upgrades that are needed. One you have completed your list, calculate what it would cost to bring the home to a point that you are ready to sell. This list could include major or minor costs, such as:
* Paint to refinish all or a few rooms.
* New flooring, or cost of carpet cleaning.
* Bathroom fixtures updating or replacing.
* Kitchen appliances or fixtures updating or replacing.
* Repairing or replacing roof
* Minor remodeling of any room.
It would be great if you could do all of the repairs yourself, but if you need to call in a contractor or expert in a particular field, such an electrician, this added cost should be taken into consideration before you invest. Fees may also be required for permits.
Once you have factored in the costs of repairs and updates, labor and permits, and the real estate agent’s commission, you can start the process of determining if this house will turn profit when you sell it on a flip. If the house does not sell it immediately, the mortgage will also be costing you interest every month.
Finally, decide what price you need to make it worth your investment. List the home and with a little luck and some hard work, your efforts will pay you the dividends you want.