You may have heard about house flipping before, but how do people actually make money from it?
There are strategies that can help you get ready for early retirement and flipping houses could make your dreams a reality if done right.
So, read the following suggestions to successfully flip a house for profit in 2021 and get started with this real estate adventure.
- Calculate your budget and stick with it
House flipping needs to be calculated financially or else it may generate more loss than gain. Make sure you are financially prepared and check your savings, your credit report, and any other incomings and outgoings. You need to ensure that you can cover all your expenses when you make a property purchase. Your payment history should be impeccable as banks will check it. Pay off as much debt as possible. You should avoid using credit cards or loans and only use a small percentage of your available balance. Ideally, you should pay off your full balance each month or pay more than the minimum to not add up more dept. You will also need to have cash resources as certain home renovation upgrades or house clearance services may be paid that way. You’ll need enough money for your deposit for your mortgage and any additional requirements like house moving costs for example. Make sure you still have some savings available in case you go over your budget, which happens easily. You don’t want to have to stop the building works abruptly not knowing when they will commence as this would add an additional cost.
- Go through all your options first
As you begin your quest for a house to flip consider every possibility to start with. You should choose a property that is reasonably priced, matching your allocated budget. Buying a handyman’s special may be much cheaper at first sight, but you will need to invest considerable resources into upgrading and modernizing it. This is going to cause your profit margin to shrink. Instead find a place that needs certain affordable cosmetic home improvements, such as fresh paint, some DIY upcycling, a new front door, solid garage clearance, and a bit of landscaping. Keep all the improvement works as basic as possible. Research the neighborhood of your project house as the location matters for the resale value. It should be in a desirable location with close transport links, good local schools offering the best education in the area. Ensure there are parks and other recreational sites near the property too and check on the future neighbors.
- The Selling Price should allow for some Financial Gains
When your house is ready to be flipped, you need to first do some research before you sell to ensure you get the pricing right. Compare different figures sellers are charging for similar homes in your area. Look at property listings, auctions, rentals and compare what features matter. Talk to several real estate agencies and have a property valuation done to find a price that will be right for buyers and you. Prospective buyers will usually try to negotiate and offer below the asking price so allow for some room without cutting into your profit. Work out the ideal figure based on what you spent on the property, including the purchase price and cost of renovations. Try to stick with this number when you start accepting offers and negotiate to get as close to it as possible.
- Establish a Good Real Estate Team
To flip a house is a team effort that involves several helpers from your bank and construction crew to a good real estate agent. Look for people with a good reputation, excellent testimonials, and plenty of experience. You should have advisors that answer all your questions and offer their support where needed, especially if you’re new to house flipping.
Flipping houses can be very profitable and rewarding once the hard work is completed. Invest the time to learn the ropes so that you can confidently look for auction listings, foreclosures, and online property listings. Establish lasting relationships with local decorators/builders, handymen, same day rubbish removal companies, and landscapers.
Pay attention to the for-sale signs in your chosen location and view more than one property before you choose the house that you are about to make your own for financial gains. Learn from your mistakes and become an expert with every house you flip.
Content writer and Educator by Passion | Senior Online Media & PR Strategist at ClickDo Ltd. | Contributor to many Education, Business & Lifestyle Blogs in the United Kingdom & Germany | Summer Course Student at the London School of Journalism and Course Instructor at the SeekaHost University.