If you’re keen to try and make some money in property that flows sooner rather than later, flipping houses (or other types of homes) can be the way to go. When you flip a place, you buy it, do it up, and then sell it again quickly, keeping the profits generated by your activities.
However, it’s not as simple as it may sound, and you need to be careful that you don’t end up in financial straits due to misjudgments with these types of projects. It helps to follow the below tips for tackling property flipping, no matter the area you’re considering buying and selling in.
One of the biggest elements of flipping a property is being wise with numbers. Before you bid on or make an offer on any property, you need to have spent plenty of time working out how much you can afford to spend. Determine how much to spend on a home itself and on the renovation costs, the real estate, tax, and other expenses involved with the purchase and then selling again, insurance, and more.
Come up with a total budget for the project and then break this into separate budgets for different fees involved in the flipping. Being strict in adhering to this budget as much as possible is vital, as is giving yourself a little extra in the pot to have available if and when something (as it inevitably does) goes wrong. To make a proper return on your investment, don’t go overboard with the renovation, in particular, or let the whole project drag on for too long.
To make the most profit possible per year on flipping, you need to buy a home, remodel it, and then sell it again as quickly as you can. It pays to develop a strict schedule to keep timeframes shorter. While, of course, some things won’t go according to plan, and there could be delays due to deliveries arriving late, tradespeople being unavailable when you need them, rain or other weather problems, etc., the more you plan for these things and other issues, the smoother the whole project should run.
Come up with a timeline that covers the best order in which different renovation jobs need to be tackled, keeping in mind which contractors you’ll require to work on different things and what needs doing before each one can do their job. For example, an electrician is often required before or after a plasterer and a painter after both of these people have done their work. You will also likely need a plumber before and perhaps after a tiler does work in a bathroom.
Factor in, too, any permits or other local council or other regulatory approval you’ll need to have received before work can begin. You don’t want to lose blocks of time and the tradespeople you had lined up to do jobs because you don’t have signed off paperwork when you expected it, so look into this side of things ASAP and plan around it accordingly.
Before you start out laying too much time, money, and energy on any demolition work or other renovation jobs and the purchasing of materials, fittings, fixtures, etc., ensure you know what does and doesn’t add value and what buyers look for homes in the suburbs you’re interested in.
For example, the prime target market may be interested in more bedrooms than less, in smart-home and other tech tools, or perhaps they want a pool, separate home office space, or a large yard for pets or children to run around in. Some suburbs attract young millennial couples, while others have many family buyers or are popular with retirees or other downsizers. All of this affects what people will pay the most for in the area and what you should focus on when renovating your property to flip.
It pays to ask real estate agents who specialize in your top suburb choices about what they find buyers are looking for there and what seems to add the most value in resale. You can also attend open homes and auctions to get a clearer idea of the quality and setup of places currently on the market and see what they fetch when they sell.
Once you have this information, you’ll find it much quicker and easier to make renovation decisions. For example, if you want to flip a place in a lower socioeconomic area where many end buyers are investors looking to rent their properties, you won’t want to overcapitalize on luxurious fittings, fixtures, and materials. Instead, your money will likely best be spent on things like buying a smart ceiling fan for the bedrooms and living space, putting in some low-maintenance landscaping, and freshening up the home with a new coat of paint. Tailor your remodels appropriately, and you’ll get much more “bang for your buck” when you sell your property.
Another top tip for tackling property flipping in 2023 and beyond is to focus on buying at the lowest price possible. Negotiate effectively because the less you spend on the property at the start, the more profits you can make later on, and the less stress you’ll have things that may go wrong when renovating and cost more than you expected.
To help you negotiate from a strong position, look at many properties and put low offers on numerous ones so you’re less attached to any outcome. This will show in your attitudes in placing offers or auction bids, and you’re more likely to get real estate agents advising their owners that you are set on how much you’ll allocate and aren’t prepared to pay more than you should.
You also need to ensure you don’t become emotionally attached to purchasing one particular property. This is a business transaction you’re trying to make money on, not you buy a home for yourself, and should be treated accordingly.
Other top tips to help you turn your property flipping into a success are to reuse any materials, fixtures, and fittings that you can from the home you buy and assemble a team of good people to help you (e.g., a solicitor, financial advisor, accountant, builder, carpenter, electrician, plumber, painter, etc.). Don’t forget to stage the property well to help it better appeal to potential buyers, too.
Flipping a property can be a great way to make some decent profits quickly. However, this result is dependent on many factors. If you follow the tips above, you should find that the process goes more smoothly, and you make increased profits from the project.
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