For many people, flipping houses can seem like a great way to earn a profit. If you’ve got the money to invest in an affordable house, a successful house flip will put you several thousand dollars ahead of where you were before. However, flipping can be a risky investment; you could buy a house in need of more repair than you plan for, or the real estate market can take an unexpected turn. If you’re looking into flipping a home, here are a few tips to make sure your house flip isn’t a flop.
First-Time Buying, Skip The Flip
According to the National Association of Realtors, 34% of home buyers are first-time buyers. If you’re new to homeownership or investing, flipping is not an investment for you. There are plenty of ways a house flip can go wrong, from accidentally buying a home in need of extensive repair to misjudging the real estate market. House flipping is hard to get right, and even professionals will occasionally make expensive mistakes. If you’re not used to flipping houses and timing the market, look at other options for investing before you look at house flipping.
Schedule A House Inspection
When shopping for your house to flip, be sure to schedule a house inspection. This is especially true if you’re still relatively new to house flipping; there’s a wide variety of damage that can be done to a home that’s invisible. Having a professional with you will help you spot signs of structural damage that would be incredibly expensive to fix, like issues with the foundation or frame of the house.
If you can’t afford a house inspection, do plenty of research to learn what signs to watch out for. Cracks in walls can signify a structural issue with the house that’d be expensive to repair. Additionally, look for water damage in a home; while not all water damage is a deal breaker, significant damage could end up turning your cheap flip into an expensive nightmare.
Pick Your Battles
When you’re flipping a house, it’s likely you’ll run into a few surprise expenses that will cut into your overall budget. This might mean that you have to make cuts and change your plans for what gets fixed in the house. If you do have to skip on updates and upgrades, it’s important to still finish the fixes that will get you the most money for your investment. Some of the more expensive fixes are still worth doing, even if they’ll cost a bit more. For example, 87% of homeowners renovating their bathrooms are updating their shower, and for good reason. An upgraded bathroom can be pricey, but will have a great return on your investment.
However, if you don’t have the money to invest right now in a major renovation, there are still benefits to starting with aesthetic updates. Try taking out the carpet if the home has wood floors underneath. Carpet can hold up to one pound of dirt in a single square yard even if it looks clean, and wood floors can be updated to look gorgeous and modern, even in an old home. Adding, or updating, the HVAC system can contribute to a positive return on investment as well. With the HVAC industry having revenues of $60 billion a year, these services are clearly in demand for homeowners.
House flipping can be an exciting investment opportunity, but it can also be incredibly risky. Use these tips for your house flip to make the most money possible from your real estate investment.
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Here are you doing great writing about house flipping tips to avoid a flop? If you get the deal of a lifetime snapping up house in foreclosure for a song say you need to know which renovations to make and which a skip. You also need to understand the applicable tax laws abs know when to cut your losses and get out before your project becomes a money pit.