Thanks to the many home renovation shows on television, “flipping” homes has become a popular theme in the real estate market. Basically, flipping a house means that you try to purchase a house cheap, renovate it, and then try to sell it for a huge profit in a relatively short amount of time. There are several factors that go help or hurt your profit margins, but the biggest obstacle is finding the perfect house to flip.
Always try to purchase the worst house in the best neighborhood. The price you pay needs to be below its local market value. Remember that the worst house in the neighborhood can only get better and therefore increase in value. You want to get the house for as low as possible to give you more profit margin.
Good School Districts
Good schools are one of the first things people will look for when searching for a house to buy. If your flipped house is in a bad district, you will have a much tougher time selling it. Houses that are near excellent schools will sell much faster and get your profit in your pocket sooner.
Close to your Home
Renovations rarely go as quickly and easily as you plan. If your project is far from your home or where you work, you will be spending a lot of extra hours driving to and from the house. Your profit will drop considerably when you factor in traveling costs. If at all possible, choose a house to flip that is close to you.
The whole point of flipping a house is to improve it. However, you want to find a house that is basically sound and only needs cosmetic repairs. A house that needs to be completely rewired, a new roof or foundation work can cause your costs to skyrocket quickly. If possible, bring someone with you that can help you decide if the house’s structure is sound. Remember to consider the plumbing and wiring, also.
The Improvements it Needs
Consider what kind of renovations you may need to tackle. If you buy a sound home that only needs cleaned and painted, you are sure to make some serious cash. However, many homebuyers are looking for other upgrades that you may have to think about for your house. A new kitchen is often one of the first things people look for, so be sure to plan to upgrade your kitchen as much as possible. Bathrooms are also important to homebuyers. Before you purchase a house, plan on how much you have to spend. You do not want to plan to spend every penny you have as expenses are always more than you think. Experts say you should always plan to spend 20 percent more than any estimate you have.
Location, Location, Location
Experts cannot say it enough: Make sure you purchase a home in a desirable location. You could put a million dollar home in the wrong place and no one will look at it. Often, when people begin to look for a new home, location is the first thing they use to eliminate houses. Look for houses that are in good school districts, in areas where real estate prices are climbing and where businesses are beginning to locate. The perfect location may be hard, but it is one of the most important things you need.
Flipping houses can be hard, but if you can do much of the work yourself and truly enjoy the process, it can be a way to earn extra cash in a short amount of time.