How to Flip Without Flopping
Buying, renovating, and reselling a property can seem like an easy way to make a quick chunk of change. It relies on a relatively simple principle: sell high after buying low. Purchase a low-cost property, due to its age, interior, exterior, for any combination of negative aspects, put some money into renovating it, and then sell it for far more than the purchase price. And that can be the case, as long as you’re willing to do some preliminary research and have the right tools at your disposal.
What You Need to Know
When looking into a property to purchase for a fix and flip, there are a few things you need to consider. It’s important that you have done some research on the surrounding area, as looking into the prices at which comparable properties have sold can give you a good idea of what you might be looking to make. Of course, you need to have a good idea of the property you’re looking to purchase, first, so that you can know how much you might need to invest to bring it up to an appropriate state for selling. Just because a house is of a similar size and layout to the one you’re planning on renovating doesn’t mean that they can sell for the same amount. The size of the lot, the state of the kitchen, whether appliances are up to date and the size of the rooms can all have a big impact on how much someone is willing to pay.
After you’ve done that research and have a reasonable selling value in mind, it’s also important to think about how long it will take to complete the renovation. The longer you possess the property, the more you’re paying for it. Just because you can sell it for a high value doesn’t mean that it’s a good deal. Make sure that the renovations you intend to complete don’t take too long, or you’ll be paying not only for that work but also for the mortgage and any other costs associated with owning and remodeling.
The long and short of it is that engaging in a fix and flip investment strategy can work. If you have the connections or experience to complete renovation projects and have a good understanding of how the housing market works, you can stand to make these types of projects quite profitable, but to do so, you’ll need to be willing to put in the work.