Flipping Houses: 5 Rookie Mistakes You Want To Avoid
The internet and television have made house flipping seem like a great way to make easy money. While it is true that there are deals to be had, it is also easy to lose money if you walk into one of these investments unprepared. By familiarizing yourself with some common mistakes, you can minimize your risk.
Don’t over improve.
It can be tempting to really put in a show-stopping bathroom or kitchen, hoping to draw in potential buyers. You need to look objectively at the home and the neighborhood before you do this. If you spend a lot of money to install finishes that are higher end than the style of your house, and of the neighborhood, you are not likely to get that money back. Sure you want things to be nice, but over-improving for the house and neighborhood is a waste of money.
Don’t let projects drag on.
The best way to make money on a flip is by getting in and out as quickly as possible. Whether you are handy and plan to do the renovations yourself or are hiring someone to do the work, you need to take a hard look at your timeline. Kitchen renovations, for example, are nearly always on the agenda for a flip. Whether you are looking to simply update the appliances or plan for all new cabinetry and flooring as well, you should be ready to start the minute you close on your flip so the renovation schedule stays on schedule.
Don’t treat the home like it will be your own.
The choices you would make for your own home don’t really apply to a flip. You want it to be appealing to buyers, while at the same time allowing them to see the potential. You want fixtures, paint colors and appliances that form a neutral backdrop for the new homeowner.
Don’t try to do everything on a shoestring.
Trying to do all of the remodeling for the lowest possible price is not the best use of your time and effort. Properly done renovations not only increase the home’s value but also helps it to sell quicker.
Don’t list until you’re ready to sell.
It can be tempting to list your home before you are finished with renovations. In your eagerness to get a sell, you may actually increase the amount of time your home is on the market. People who see the not-yet-finished home are less likely to view it for a second time after the work is completed, and are not going to expect to pay a premium for a home that is still undergoing renovations. Aim to get the work completed as quickly as possible and then list the home once you are satisfied with the renovations.
As you can see, there is a lot to think about before flipping a home. Real estate is an area where there are still deals to be found and flipping can be a good income producer. It is important to educate yourself on the process before jumping in.
Article submitted by Kara Masterson. Kara Masterson is a freelance writer from Utah. She enjoys Tennis and spending time with her family.