Many people buy houses not because they want to live in them but because they intend to sell it for a profit. This practice of purchasing real estate, improving it and putting it back into the marker is known as flipping property. It is a business that can be exceptionally lucrative if you use the right practices.
According to experts, the average profits for flipping home has been at an all-time high, with sellers earning as much as $66,000 over the average house price.
To make a large profit from flipping property, below are 6 tips on how you can ensure you don't spend more money than you'll get from a sale.
- Inspect A Property Thoroughly
Before you make any offer for a property, you must give it a thorough inspection. First, be sure to visit the property yourself to ascertain how it looks. Go over every inch of it and ask all the important questions: has the house suffered massive structural damage before? Any types of pest infestation? When was it built?
You should also have it looked over by a home inspector. Their assessment will be crucial in determining if a house is more trouble than it's worth. If you discover that a property that you're looking at is hiding more damage than you thought, politely decline to make an offer and move on.
2. Buy Properties with Cosmetic Damage
You should avoid buying houses that have extensive damages to their crucial components. Outdated electrical systems, crumbling plumbing and damaged foundations will cost you more money to replace efficiently, not to mention take months to repair. It's much cheaper to buy properties that only need a bit of touching up to improve.
For example, buying engineered hardwood flooring supplies to change a kitchen's floors is much cheaper than ensuring all the pipes in a house are free of lead.
3. Go for Timeless
Instead of chasing trends like cottagecore aesthetics and similar flash-in-the-pan type of design fads, try to go for a timeless appeal instead. Trends can be helpful in appealing to the design forward market, but by the time you've finished construction and repairs on your property, the world and your market may have moved on to a different trend already.
Look for common considerations and things that appear in most house hunting checklists. This approach may not be as flashy, but it can secure sales for much longer time than a trend.
4. Have an Exit Plan
You will have to face the fact that you might not be able to off-load your property and you may not make as large a profit as you thought. You need to develop an exit plan so you don't lose as much money.
For example, you may wish to turn the flipped apartment into an Airbnb or a similar rental property. Or you could move into it yourself. There are plenty of ways you can make a profit from a newly renovated property without needing to find a buyer. Explore them and always keep them handy.
5. Target a Market
Effectively flipping a property is just like selling any other kind of product. You must have a specific target market in mind or else your property may not be as appealing as you wish. There are countless types of targets within the homebuyer's market and each one responds to different features.
Families with kids will enjoy homes that have multiple bedrooms and childproofed. Those with pets will love properties with lots of room in the yard for their animal companions. Determine which features your target market are looking for in a home and you're basically guaranteed a sale.
6. Go Green
More and more consumers are becoming aware of the impact of their actions on the environment. To this end, many are choosing to purchase property that have ecofriendly features.
For example, you can install an array of photovoltaic cells on the roof and rightfully claim that future owners won't spend as much on their electricity bill. You can also put in tankless water heaters which use less energy and water.
Or you can put in a rain catch that can process and purify water from rainstorms. These considerations will make your property more attractive to plenty of people who would like to live in environmentally responsible homes.
Flipping a home is both delicate and difficult but the payoff can be worth it. As long as you keep a level head, make sound decisions and listen to great advice, you can expect to turn a large profit from your recently renovated property.
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