Real estate flipping is slowing across the USA due to several factors, including a dwindling housing supply and declining profits. This doesn't mean that profitable house flipping is no longer an option; it simply highlights the need for caution.
So, if you're considering buying a cheap house and renovating it to sell for a profit, the benefit of others' hindsight could stand you in good stead.
Read our beginner's guide to flipping dos and don'ts before you decide.
1. Don't Underestimate Renovation Costs
Home flipping shows are all the rage on HGTV, drawing in thousands of viewers every month, but don't let these quick, always under-budget renovations fool you. The network admits that they sometimes chip in for some of the work and that the owners usually need to pay extra for items used to stage the home.
It's vital to base your pre-purchase research on real-world costs and set up a budget for renovations accordingly. You must set aside money for unexpected costs and factor in costs associated with permitting and professional fees.
2. Don't Ignore the Markets
The U.S. real estate market still favors sellers, but that doesn't guarantee you'll profit from your endeavors. In-depth research will reveal desirable up-and-coming neighborhoods or popular areas where you could earn a profit from the sale.
You must work with an experienced and knowledgeable real estate expert when choosing a suitable home for flipping.
3. Don't Rush Real Estate Flipping
Successful house renovations depend on a planned approach. Never underestimate the time it takes to navigate the necessary inspections and inevitable delays.
Rushing will only lead to shoddy workmanship and reduce the value of the property. Set a realistic timeline and stick to it as best you can.
4. Avoid Going Overboard With Improvements
One of the most important property flipping tips is to carry out renovations within reason. Most buyers want a comfortable home that caters to their basic needs.
Many people don't want the extra hassles associated with a swimming pool or the price tag associated with an outdoor kitchen. They may prefer to add personalizations over time. A real estate professional can advise you on worthwhile improvements that can result in a favorable ROI.
5. Don't Start Without an Exit Strategy
Holding costs on a property mount up quickly. Set a deadline for your home flipping exercise, or you could end up holding onto the home for too long or be forced into selling it at a loss.
It's best to sell the home shortly after completing the renovations or consider renting it instead.
Don't Take on House Flipping Alone
Real estate flipping is a fine art requiring market knowledge, experience, financial savvy, and a little luck. You can make a considerable profit from a well-executed house flip if you get this magic formula right.
You could face losses if you under-research and overspend, buy property on a whim, rush renovations, or hold onto the home for too long. Getting expert help at the outset is imperative for making sound investment decisions and getting this delicate balance right.
PMI Wasatch Front can assist you with guidance on every aspect of real estate investment in Murray, UT. We are backed by a franchise with two decades of real estate experience and are dedicated to delivering customized service for every client.
Team up with us to ensure you enjoy a smooth and profitable house-flipping journey.
