One of the quickest ways to make money through real estate is to buy and flip houses. Buying and flipping houses simply mean purchasing a property below market value, doing a simple renovation, and then selling the property again shortly after at a higher price. But despite sounding easy, flipping houses is harder than it looks, and with one wrong move you could end up losing money.
Here are five tips to help you.
Learn Your Locations
When it comes to finding the perfect property to flip, location is key. Do your research and find a property in an area that is in high demand, such as a suburb in a major city or an area that has good schools or transport links. Cheap property in these areas may be a little harder to come by, but by sitting on money-making land, they’re going to be easier to flip for a profit.
Make Sure You’re Buying for Below Market Value
It may seem obvious, but if you’re going to make any money, then you need to ensure that you are buying for below market value. What’s more, if you’re planning to do some renovations to the property, then ideally these too need to be accounted for in the price and so the lower below market value, the better.
Focus on Inexpensive Renovations
When it comes to making the necessary renovations to your property, you will generally get a higher return from sinking your cash into the kitchen and the bathroom than in any other area of the house. After these improvements are made, everything else is usually cosmetic, and a quick lick of fresh paint and some new flooring will sort out the rest of the rooms.
Don’t Go Overboard
In most cases, it’s not worth going overboard with your renovation plans. Keep things simple, keep them cheap, and get your profits into your pocket. Sinking too much money into a house will only improve its market value by so much, and you risk losing your profit margins if you don’t end up getting the price you are asking for. Focus on doing the bare minimum to the property and selling it as quickly as possible.
Know Your Buyers
Last, but not least, know your buyer. Depending on the area that you are flipping your property in, your next buyer could be a potential landlord or a real-estate developer who is going to knock down and build on the plot anyway. Get to know your target buyer so that you can focus on making improvements that will appeal to them. If you think you’ve made a mistake and bought the wrong property for your potential buyer, then get your risk free offer from a large home-buying business such as Brother’s Buy Houses – what have you got to lose?
So there you have it – five simple tips that will help you flip your first property and to start making money in real estate. Have you ever flipped a house before? How did the process go? What profits did you see? Let me know in the comments below.