With so many renovation shows giving insights into the life of flippers and the profits that can be made, more and more people are turning to this strategy to build savings, replace income, and pursue their passion for real estate.
However, the shows don’t often demonstrate that flipping doesn’t always work. It’s just as likely you lose money as it ÷is that you make it (if not more so). Then, new flippers must tread carefully through this exercise and look for strategies to increase the likelihood of success. There are various home improvement tips you should know today.
Create a Budget
One essential step for all first-time house flippers (and more experienced ones, too) is to work out the total spend on the project. Renovation work generally costs more than you think, so you need to set a budget that includes expected expenses and unexpected ones. Issues you didn’t see coming might pop up that require more funds. For example, there’s water damage, termite infections, faulty wiring, burst pipes, and more.
Your budget should include bank fees, insurance and warranties, delivery costs, and demolition and rubbish removal charges. Plus, create a budget before you purchase a home so you properly crunch the numbers and determine if you can afford to buy, renovate, and on-sell the property.
Come Up with a Strict Schedule
Next, come up with a strict schedule for the work. The longer a flip project lasts, the longer you’ll pay holding costs, and the more likely your expenses will increase exponentially. When you put a schedule in place, this keeps you and contractors more accountable.
Speak with your builder or contractor or Handyman Wichita KS to determine the order in which tasks must be completed. You might also want to see if you can put deadline terms in contracts with people to give them more motivation to avoid delays.
Complete Home Improvements Buyers Want
Be unemotional and practical when you’re flipping a house rather than renovating it for your own needs. Research the market and determine what buyers in the suburb desire in their properties. Don’t assume that what appeals to you is also what appeals to local home-buyers or investors. For example, retirees often look for houses on one level with smaller yards, so they can get around and take care of properties easily as they age.
Families with young children want big backyards, more bedrooms, and things like pools or play equipment. Working couples typically focus on being close to amenities and having an office onsite. At the same time, millennials are more likely to want properties with all the latest tech gear and other mod cons.
Research what the recent top-selling houses in your area do and don’t include. Also, speak with real estate brokers about what they notice buyers ask for. All this information will help you add the necessary elements to your property while not overcapitalizing on things no one wants.
Focus on Affordable Cosmetic Work and Keep What You Can
When renovating, always focus on completing more affordable cosmetic work rather than costly structural changes. This way, you’ll have less chance of things going wrong that blow out your budget, you’ll complete the project sooner, you can do more work yourself, and you’ll spend less money overall.
Only consider structural work if you know doing so will bring a corresponding boost to your sale price. You’ll also want to ensure you have trusted contractors to do the job who won’t overcharge you. Get quotes from them before you proceed.
It pays, too, to keep as many items already in the home as you can. While it might be fun to go and pick out a raft of new appliances, flooring, fittings, and fixtures, this all costs money and eats into your budget.
Instead, keep everything in decent condition. You’ll be amazed how many can be brought back to new or freshened up for resale with a thorough clean or some repairs. For instance, many buyers like to have appliances included in properties. As such, when required, arrange a refrigerator, oven, dishwasher, dryer, or washing machine repair at a reasonable price, rather than outlaying funds on new products.
You may also be able to get tradespeople to repair or replace broken tiles or deep steam-clean dirty carpets to get them looking decent again.
Becoming a house-flipper is generally equal parts exciting and nerve-wracking. However, as long as you go about the process practically and get the advice you need to proceed carefully, you should be able to both enjoy the process and obtain good results from it.