The prices of residential homes are rising rapidly, while the real estate listings are stuck in a rut. This turned the house flipping into a highly competitive business, with a potential for record profit for investors. To prosper, you need to take all aspects of real estate market into consideration and prepare for every possible outcome. Here are some top advice for successful flipping.
Crunching the numbers
It’s essential you do the math through and through before setting your renovation project in motion. Calculate how much you can afford to spend on both the remodelling process and the property itself to the last digit, and the risk you’re prepared to take.
Price out the costs of taking a loan (preferably short-term), utility bills, taxes and a yearly home upkeep. Also, don’t forget about the material and labour related expenses. To assess the minimum price your flipped property can reach, check out the similar properties on the market. Once you fully do the math, start shopping for affordable houses.
Get to know your market
To turn your property into a quick and lucrative sell, figure out the needs of the potential buyers and pinpoint your niche. To do this, you should ask yourself these questions first:
- Is the coveted neighbourhood relatively new and in transition but not quite there,
or established with competitive pricing?
- Are there good schools in the vicinity that may attract family people,
or the community is more appealing to the elderly?
It’s paramount you learn about the not-to-exceed number for a particular neighbourhood. Study the statistics concerning the recent sales and average period of property’s stay on the market. This will give you an idea on how long to wait before you finally put it to sale.
In a recent conversation with the experts at Slattery Asset Advisory, it was brought to my attention that it’s best to rent it to reputable clients or perform some small touch in the meantime until the market is ripe for picking. If you’re juggling several properties at the same time, it’s recommended to seek professional help for property management.
Redecorate with the prospective buyer in mind
Young families with kids tend to favour traits like open kitchen setup and vicinity of renowned schools. If this is your niche market, investing in an open floor remodelling ventures would be money well spent. Make sure you include enough bathrooms for all family members and a His and Her bathroom vanity setup. Tackle the basement if your budget allows it. Apparently, fixing up the master bedroom is no longer a game changer, but do make sure that the couple has their own en suite.
On the other hand, if the area is popular with retirees, browse for ranch style houses or comparable one-level properties. Any type of staircase should be widened and tightened. Accessibility is a big deal for elderly people, so make sure that the porch can be fitted with a wheelchair ramp and it hasn’t got steps that lead to the front door. People of all ages love to spend time on the patio, so setting aside some money for this project will be well worth it. Also, this can absolve you from additional costs for yard upkeep.
Educate your buyer and set the right price
A potential buyer should be presented with major upgrades and repairs you’ve done, such as HVAC introduction and electrical network replacement. Take the photos of recently retouched segments, such as new roof or landscaped frontyard, and make a full list of brand new additions. Lastly, provide the potential owners with safety requirements and instructions for use.
One of the traps of house flipping is precisely the act of overpricing the redecorated property. Yes, you have put your heart and soul (and money) into this process, but the buyers should not know all about its initial shabby look. However, slightly underpricing your property can attract the buyers and leave you with the higher number than the one you submitted initially.
It pays off to be well-acquainted with the rules of the flipping game and constantly follow the market fluctuations. With our comprehensive starter guide and additional expert tips, you’ll make profit in no time.