Flipping properties is a great way to make relatively quick profits through a real estate investment. Like most other business endeavors, it requires careful planning and hard work, but most of the time, it boils down to making the right property choice. Picking the wrong house can hurt your investment regardless of whether you have the most qualified construction team or a healthy budget.
There are certain things experienced flippers would always consider in choosing a property. We’ve broken them down below into five essential tips:
Set a budget
Before even going out to look at properties, it pays to set your budget and determine your financial capacity. Doing so filters your options and gives you a concrete idea of your goals and how much you can actually put into the renovation.
Getting your budget and goals set in the early stages narrows down your options, and lets you zero in on a property where your investment would lead to big returns.
Identify high-demand areas
Being within your budget doesn’t automatically mean a house is suitable for flipping. Before making your purchase, you need to determine how hard or easy you can sell it later. Ideally, a flipper can buy a property with a comparatively low value in an area with high demand. Keeping your prospecting within these areas ensures that there will be a good market for your flipped house once it goes on sale.
Consult with local partners
Working with local prospectors and agents can be a very smart move, especially if you’re not confident about your knowledge of the market. While quick research may tell you a lot about available properties in an area, the opinion of people in the industry more familiar with the market you’re entering should always also be considered.
Find out the property’s history
Always ask why the property is for sale and when it was constructed. This information should give you at least a working idea of how much you’d need to put in to make it profitable without having to do an extensive inspection. If a house is very old or is being sold because of serious structural problems, the long and costly repair job you’d have to do might not be worth it.
Listen to your contractor or engineer
Whenever possible, your contractor or engineer should always see the house you’re looking to buy. Always consider their opinions about construction matters. How hard or easy the renovation goes can make or break your investment, and it pays to consider what the experts have to say before purchasing a property. Consult with them first and identify which parts will need to be repaired or improved prior to making your purchase.
Before you go…
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