If you are anything like me, then you just can’t get enough of the “house flipping” shows that are all over the home improvement television channels these days. In fact, at any given time, there are 2 or 3 “make money flipping houses” shows being broadcast. But how true is the picture they paint? Can you really buy, rehab and sell a house on the budgets shown? Can you make big money flipping houses?
Here are some of the main considerations to take before going off to be the next realestate millionaire.
Buy Low, Invest High
It stands to reason that you are going to have to sink some money into your investment property. But just how much you put in will depend on several factors, the least of which is the current condition of the house. If you are buying a foreclosure, then consider that the reason you are getting the super good deal is because the bank does not want to invest the money needed to get theirs back. Instead, it is cheaper for them to sell you the house at a loss. That means you may have some major work to do.
Most normally, these major issues will involve plumbing, electrical or even structural problems that can cost thousands to fix. The good news is that even investing $30,000 in structural repairs is worth the profit in the end if you are smart.
The Location Does Matter
I would never recommend you buy a house in an area where there is high crime or high foreclosure rates or both. You have to think about the fact that the housing market is not going to recover anytime soon, and those areas will continue to struggle, thus meaning that you house will be tougher to sell. If you want a quick sale, then wait until you find a super low priced house that is still in a good neighborhood. This is possible but takes patience.
Replace The Hot Buttons
If you want a faster sale, then you definitely need to make sure the new homeowner is secure in the fact that he or she won’t have to make any major repairs any time soon. What I mean is that you should definitely give them a new furnace, central air system, water heater and roof. If these things are brand new, it will give your potential buyer piece of mind. These items will also help your house sell before the others in the neighborhood that don’t have these improvements.
Fresh Landscape The Outside
You will have a much better chance of selling your investment property if you provide a home warranty inspection and complete home package from a trusted company like American Home Shield. It shows confidence on your part as the seller if you are willing to back up all of your hard work with an insurance policy. Buyers will definitely use this as a reason to buy your house over others that don’t offer this perk.
So now are you ready to go out and get the house flipping bug? If so, just be careful and have fun. The money will follow soon enough.
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