Buying your first house to flip is exciting and challenging. You can make a great profit if you make prudent decisions about property renovations. Then, marketing your upgraded house with a knowledgeable realtor can often lead to a profitable outcome. Here are five tips that could help to turn your residential investment property into a lucrative sale. Find the right property to flip, set a budget, do some improvements yourself, hire qualified contractors, and price the property right. Read on to learn more about each of these tips.
Find the Right Property to Flip
Buying the best investment property requires you to browse several residential properties currently on the market. Narrow the pool to somewhere between three and five if possible. Get comparable home sales figures in the neighborhoods of each of the finalist homes to determine how much a profit you might make after improving the house. You should also look at local school reputations, area crime statistics, and proximity to amenities like a supermarket and pharmacy as well as connecting highways. It is a good idea to get a home inspection by a professional inspector who can provide a detailed report on what needs to be done for the house to pass financing standards as well as safety codes for things like electric, heating, and plumbing.
Set a Budget
Work out a budget for the costs of repairing the property you intend to sell. Include materials and labor as well as delivery costs, unless you or a contractor plan to do that. Don’t forget expenses like the mortgage payment (unless you paid cash for the home), monthly utilities, semiannual taxes, and homeowner’s insurance premiums. Keep your improvements in line with the budget.
Do Some Improvements Yourself
Decide which jobs you can handle without hiring someone. For example, you might be able to remove old carpets and pressure wash the home’s exterior. Only tackle the work that you can safely and competently manage.
Hire Qualified Contractors
For complex improvement jobs, like replacing the furnace or rewiring the house, hire licensed experts who can do the work at a fair price. You may be able to reduce costs by doing some of the preparatory work, like clearing the lot of weeds or damaged fencing, before the landscaping professionals do the rest.
Price the Property Right
When the house is fixed up and ready for the market, work with your realtor to price the property competitively with others in the area. Decide which factors, if any, you are willing to negotiate, such as installing new kitchen appliances or reducing the sale price by a few thousand dollars to cover cosmetic repairs like paint or carpet that have not been done.
With careful planning and a reasonable budget, your investment property could sell quickly and earn a decent profit.