Flipping houses can be very profitable and can help build your wealth, but it can also be disastrous and cost you money if not done correctly.
House-flipping is a relatively new concept; it is essentially purchasing properties, renovating them and then quickly reselling them for profit. Consider the following tips for house-flipping:
Work your way up
When house-flipping, one of the biggest mistakes you can make is to be over-ambitious, particularly when starting out. The best approach to take is to start small; start off with a small house or an apartment, one that doesn’t require much work to flip.
Do your research
Don’t underestimate the challenges and demands of flipping houses. The strategy has become very popular, with numerous television shows being focused around house-flipping; don’t be fooled by this. To be successful at house-flipping, you need to consider various factors, such as:
– Buying in the right area
– How much profit you can honestly expect
– Strategies for renovating in the most cost-effective way
– Delivering what homeowners will be looking for in the particular area you are selling
Build relationships with contractors
If you intend to make a career out of house-flipping and build your wealth, it would be fruitful to build relationships with contractors. Contractors are people, just like you, and they are also looking to get their paycheck at the end of the week. Building a strong relationship with your contractors has benefits for both parties. For you as the flipper, it allows you to work with someone you can trust and who is dependable, who understands your wants and needs, who knows they will get paid on time and that you will be a continued source of income if they do their job well.
Focus on aesthetics
The idea of house-flipping is to do the flip quickly and efficiently. The best way to do this is to focus on aesthetic changes and avoid houses that are going to need any structural changes or repairs. When renovating rooms such as bathrooms and kitchens where plumbing is involved, it is wise to avoid rearranging and moving fixtures. It’s also beneficial to prioritise the taste of the potential buyer over your own tastes.
Stick to your budget
Breaking the budget is the biggest ‘no-no’ when it comes to flipping houses. If you do your research efficiently, there really should be no reason to go over budget. To avoid going over budget, speak to people you know who have flipped, or who work in this industry such as a contractor or a real estate agent.