Things to Keep in Mind Before Investing in a House Flip
For many people, house flipping can prove to be a very lucrative business. The key to house flipping is knowing which properties are worth your time and money; so that you make the biggest profit when you sell the home. In order to make the most return on your house investment, keep the following tips in mind before you decide to flip a house.
Location, location, location!
Take a look around the neighborhood that the home is for sale in. Are there good schools nearby? What is the nightlife like? Are there good restaurants and shops around? Look into other real estate in the area— are they selling fast, or is no one buying them? These environmental factors play a huge role in how in demand the house will be– despite how upgraded it is.
Don’t bite off more than you can chew.
If it seems like the house literally needs to be torn down and built from the ground up again, make sure it’s worth the investment. Educate yourself beforehand on basic plumbing, and electrical systems– this way you can learn what to look for, and determine if certain problems are easily fixable. If you still don’t feel comfortable determining if the home is a good buy, bring along a professional who knows how to quickly seek out major problems before you put an offer down. Running a professional inspection is never a bad idea; you’d want to know if there was a pest or mold problem below the surface.
Start with the kitchen.
In most homes, the kitchen is the most important room in the house, and will probably be the most expensive, time consuming part of the remodeling process. Really think about how much you’d need to spend on the kitchen to make it stand out to future buyers. After the kitchen, comes bathroom remodels, and any other rooms. If you start to budget your money with this frame of mind, it will be easy for you to assess if it’s a worthy investment or not.
What’s the home worth?
When you’re looking at the value of the home in its current state, make sure it’s priced below its value in the local housing market. If the house is priced at market value or any higher, you won’t be making much of a profit on it. Consider going to a good neighborhood, and investing in the home that appears to be in the worst shape– don’t invest in the best home that’s sitting in a bad neighborhood. A run down house in a good neighborhood can only go up in value once it’s fixed up.
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