House flipping is purchasing a house, making major renovations and improvements, and selling it for a premium. As this will definitely cost some money, you will need to budget your activities, so you can expect a decent markup when you sell the house.
- Choose the right investment. In order to house flip, you first need to choose the property that you would like to flip. Remember than in making decisions about your investment, you need to assess if the property cost and the upkeep is within your means. During your assessment period, you also need to determine if the expenses that you will incur is still well-suited to your planned selling price. Since the selling price needs to be competitive enough for people to buy, you need to make sure that you can make a good profit out of the sale, on top of your expenses.
- Start planning. The renovations that you will conduct during the house flip must revolve around the money making rooms. First is the bathroom, because in real estate, this is one or for some people the most important part of the house. You need to ensure that everything is working properly and that the bathroom is enticing to the client. Another area that you need to fix up is the kitchen. This is important especially if the client buying the house is into cooking. It needs to have enough space for them to move about, and enough area to store kitchenware and food. If you can add a little more cabinets stationed along the kitchen walls as space saver storage areas, this may be helpful.
- Aside from the renovations to be done inside the house, another important thing is to make the exteriors presentable. The upkeep of the yard or garden for example will allow your clients to view the house in a better light. If you present the totality of the house from the inside to the outside in an explicit manner, your client may not have any reason not to take the house. All it takes is a little organization and making it as presentable as possible. House flipping should make your clients envision themselves living the rest of their lives in that house, spending time with family and friends or maybe even host some parties.
- Do the budget. Add up your estimated costs for the renovation of the house. As a rule of thumb, you should budget for expenses that are less than your projected return on investment (ROI). For example, you plan to buy a house for $100,000 and you project a selling price of $110,000, then your budget for renovation should be well below that markup of $10,000 to make you a decent profit.
- Know your timeline. House flips become more and more expensive as time goes by. This is because you put back the money you’ve earned from flipping a house and buying another one for the same purpose. Owning a home for more than a minimum time period might also entail some tax liabilities. Therefore, selling a house quickly is key to successful house flipping.