House flipping is becoming a very lucrative market. It’s an easy way to get into real estate investing without having to build a new house from the ground up. If done correctly, it’s an excellent way to make a hefty profit in a popular city like Melbourne.
It’s not uncommon for potential house flippers to reach out to the real estate agents Langwarrin residents rely on to sell their properties. There are however a few tips that beginners should keep in mind, to ensure success from the beginning.
What is House Flipping?
The term house flipping refers to the process of buying an abandoned, foreclosed or even dated property, repairing it and then selling it for a profit. While many reality TV shows make this process look quick, easy and affordable it’s important to keep in mind that it’s a lot of work and often requires a considerable cash injection.
Vital Pointers For Your First House Flip
House flipping, while very profitable, also comes with a high amount of risk. To avoid wasting your time and resources, it’s important to do the right amount of research before you invest money in a run-down property. Furthermore, consider the tips shared by our real estate experts.
1. Research is Key
As with any other venture that costs you money, house flipping requires its fair share of research. The best way to get into the house-flipping business is to align yourself with a mentor who has already had success with it. That way you’ll be able to learn tried and tested hacks to make the process as simple as possible.
Another way to do research is to join house-flipping groups on social media and network with people who have been successful. Keep in mind that planning is essential to ensure you make profit down the line.
2. Be Wary of the Cheapest Properties
You may be tempted to buy the cheapest project you can find, thinking that it will sell for a huge profit. However, there may be a hidden reason why the house is so cheap and it’s usually hiding a very costly repair.
Some problems will cost more money to repair than the profit you make on the project. Avoid properties that have any of the following issues:
- Dry rot
- Requires foundation work
- Mould and damp
- Termite or other wood-boring insect damage
- Extensive roof damage
It’s also important to insist on an inspection before settling on a property. If you’re not sure what to look for, enlist a professional to do a certified inspection. This will avoid you ending up with a property that will cost a fortune to repair and cause you to make a loss.
3. Review Different Houses Before Buying
When you’re looking for houses to flip, it’s important to keep your personal preference out of the mix. Don’t buy properties with features that you like. Rather opt for features that will make the home easier to sell.
Remember, you aren’t buying a house for yourself or your family, but rather to make money in the real estate market. Speak to someone the understands rental property management Langwarrin based to determine what people are asking for when they do general enquiries. That should you give you an idea of what people are looking for.
4. Get Multiple Contractor Quotes
Another crucial aspect to keep in mind is that house flipping isn’t a weekend DIY job. You’ll need professionals to ensure that the repairs and renovations are done according to state regulations. Furthermore, getting several quotes will make it easier to choose the most cost-effective options.
You will also need to check contractor references to ensure that the tradies you’re using have the necessary experience to do a proper job. Be sure to check their reliability and ability to meet deadlines by reading reviews.
5. Prioritise Repairs
When tackling a house flipping project your aim shouldn’t be to remodel and renovate everything. For starters, that will cost a fortune on materials and labour costs. Secondly, a major overhaul will also take much longer, meaning you’re going to be out of pocket for much longer than you anticipated. Ideally, basic repairs should make it easy to resell the house, such as:
- Paint interior and exterior
- Check water leaks
- Update kitchen cabinets (Refinishing is cheaper than replacing)
- Clean the property and update the garden
- Power wash and brick surfaces
- Replace broken windows or repair screens
- Repair or replace the roof gutters
- Replace broken light fixtures
- Deep clean any carpets or repair damaged floors
- Install new smoke detectors
- Replace the toilet seat
- Add modern shower curtains or install glass shower doors
- Service the hot water tank
- Clean out the garage, repaint and if necessary, replace the door
Final Thought
House flipping is a fun way to make some extra money. All it takes is some time, patience and an educated and well-researched approach. Use our tips to help you get started to avoid losing money on your first deal!