Flipping homes has become more popular in recent years, in large part because of the success of TV shows that follow professional renovators. “Flipping” is simply the process of buying a home in a promising neighborhood that has some inherent issues, renovating the home to fix those issues and make it attractive to buyers, and then selling it for a profit.
Flipping sounds easy enough, but this is actually a complicated process that can be fairly delicate, financially speaking. You must know exactly what to expect if you want to succeed.
Buying a home to flip is still a major expense
The hardest part of the start-up phase is acquiring the capital to buy the home. Investors who do this with loans have to factor the cost of interest into the overall cost of the project, which changes how much they can sell the home for and still make a profit.
Timing is important
Every month that an investor holds a home is a month without the income from that home — and, potentially, with more interest. Moving quickly is important, while still doing a high-quality job that makes the home attractive to buyers.
All buyers have different tastes
If a renovation is too strongly rooted in the renovator’s personal taste, it may not appeal to some buyers. If it’s too bland, though, it won’t look as attractive as it should. The key is often to find a balance and create an attractive home that most buyers will like.
Where do you begin?
If you’re interested in buying, selling, investing in the real estate business, you must know where to begin. That’s where an experienced law firm can be so helpful.