Home improvement shows aren’t the only ones that can flip a home for profit. You can too! In 2016, figures from Trulia indicated that over 6% of home sales were from flipping homes. It is an investment, but when done right, it can be a great one!
What is House Flipping?
Simply put, house flipping is when an investor buys a house with the purpose of re-selling the house quickly. The usual method of flipping a house involves buying property that will need repairs and updates to re-sell at a higher price.
We emphasize that flipping a home is great “when done right.” Flipping houses is not done in thirty minute montages on TV. It takes work, and it takes knowledge of real estate. Investing in a project like this could end beautifully, or end up a disaster.
Tips for Flipping
1.) Flip with Cash
When flipping houses, it can be very risky, especially when debt comes into play. With that notion in mind, it’s much more profitable to flip a house with cash. Flippers pay debt for months when not bought with cash, so they have to sell the house at a higher price just to break even, or make some money out of the investment.
This can also cause desperation, and force you to potentially sell your house at a lower price just to get it off the market. This drastically can cut your profits. Buying the house with cash means you can wait out that slow market.
2.) Know the Market
We can’t stress this enough, but you need to have knowledge of the real estate market in order to flip a house. If you don’t have much knowledge of real estate, we strongly advise meeting with a real estate agent to get the lowdown on the marketplace. They can help you figure out the best neighborhoods, figuring out price points, and budgeting for renovations. It’s not wise to go in blind unless you have a solid grasp of the real estate field.
3.) Budget and Make Smart Renovations
Budget your renovations! We also can’t stress this enough. Don’t just throw money into projects on a house that will only deplete the money in your bank account.
We advise getting a home inspection on the house you are flipping. Contractors and inspectors can tell you what needs to be fixed. Don’t just pick areas you think will make the house more valuable. You want to boost the house’s value, but you need to be smart about it. Just because kitchens are crucial to home selling doesn’t mean it’ll guarantee money in the bank.
For more tips on flipping, check out these websites!