Are you thinking about flipping houses for profit? It can be a great way to earn extra income, but it’s important to know what you’re doing before you start. Here are four tips that will help you flip houses successfully.
Look for Properties That Need Only Cosmetic Updates
One of the key things to look for when flipping houses is a property that needs only cosmetic updates. This could include painting, new carpet or flooring, minor repairs, and staging. These types of updates are usually relatively inexpensive and can make a big difference in how quickly a property sells. This is a great place to start if you’re working with a limited budget.
Some people new to house flipping get attracted to fixer-uppers with extremely low prices. The downside is that you may spend as much as double the cost of the property just to get it up to a livable condition. Even worse, if you did not have the property inspected professionally, you may later discover more expensive structural or safety issues. Unless you’re an experienced contractor, it’s usually best to avoid these properties.
Partner with Renovation Subcontractors
If you don’t have experience with renovations, it’s important to partner with subcontractors who do. They’ll be able to do the work properly, more quickly, and efficiently than if you tried to do it yourself, which can help you stay on budget and schedule. Renovation subcontractors you may need include electricians, plumbers, painters, and flooring specialists.
It is better to work directly with the specific subcontractors you need than with a general contractor because you can get a lower price this way.
Be sure to get recommendations from friends or family members who have recently renovated their own homes before you choose subcontractors. Interview multiple subcontractors and get written estimates before you commit to working with anyone. You should also have a clear idea of what you want the finished product to look like before you start any work so that there are no surprises along the way.
Rent the construction equipment you need and ensure that the sub-contractors use rental equipment protection solutions. These will protect both the equipment and the property they are working on. If you are working continuously on several properties at once or a series of properties one after another, you may want to invest in purchasing equipment that you use most often. During periods that they are not in use, you can earn from them by renting them out along with the protection solutions.
Stick to Your Budget
It’s easy to get caught up in the excitement of flipping houses and start spending more money than you intended. But it’s important to stick to your budget so that you don’t end up losing money on the deal.
Ensure that you factor in all the costs associated with the purchase and renovation of the property before making an offer. Hire a professional property inspector who can give you an estimate of the cost of all necessary improvements. Bring your subcontractors to the property and ask them to give you an estimate of the cost of cosmetic improvements. This way, you’ll know how much money you can realistically make from the sale.
Price the Property Competitively
Once the renovations are complete, it’s time to price the property competitively. This means taking a look at similar properties in the area that have recently sold and seeing what they went for. You’ll want to price your property slightly below these comparable properties so that it will sell quickly.
If you’re not sure what price to list the property at, consult with a real estate agent. They’ll be able to give you an estimate of what the property is worth and how long it is likely to stay on the market.
Choose an Experienced Real Estate Agent
It’s important to choose an experienced real estate agent who knows the ins and outs of the local market. With someone like this on your side, you can find properties that are likely to sell quickly and for a good price. They’ll also be able to advise you on what improvements need to be made to the property before listing it for sale.
When it comes time to sell the property, savvy real estate agents will be able to help you price the home correctly and market it effectively so that it sells quickly. They will also be able to help you negotiate with buyers and get the best possible price for your property. Again, personal recommendations are always a good place to start when choosing an agent.
Start Flipping Houses with the Right Know-How
Flipping houses can be a great way to earn extra income, but you must go into it with your eyes wide open. By following these four tips, you’ll put yourself in a good position for success. Look for properties that need only cosmetic updates, partner with renovation subcontractors, stick to your budget, price your project competitively, and choose an experienced real estate agent. Do all of those things, and you’ll be well on your way to making money from flipping houses.