It isn’t hard to see why house flipping has become so popular in recent years. For a comparatively small investment and a brief period of hard work, dedicated flippers stand to make a handsome profit. However, this isn’t to say that every attempt at house flipping is equally profitable. If you enter into an ill-advised flip, you may wind up losing more money than you ever stood to make. As such, people who are relatively new to flipping homes should take the following pointers to heart.
Has the Property Been Inspected?
Before committing to invest in a potential flip, it is imperative that you have the property thoroughly inspected. In the absence of inspections from knowledgeable professionals, you may discover that a home costs a lot more to flip than you anticipated and ultimately wind up losing more money than you stood to make. With this in mind, enlist the services of seasoned electricians, plumbers and building inspectors before signing any paperwork. Having a home inspected by the right people can lift a tremendous weight off your shoulders and provide you with invaluable peace of mind. So, instead of pursuing every flipping opportunity that comes your way, take care to be discerning and keep an eye out for the right house flipping investment opportunities.
Have You Obtained the Right Permits?
As any experienced flipper can attest, obtaining permits is a big part of flipping homes. For example, if you intend to make any additions to the property, you’ll need to obtain the relevant permits from the right local officials. One of the many reasons it pays to have potential flips meticulously inspected is being able to receive firsthand information on various permits from the professionals discussed above. So, before beginning work on any additions or home improvements, confirm whether permits are required, and if the answer is yes, take care to acquire them in advance of diving into the project(s).
Is the Location Desirable?
Location plays a large role in a sizable percentage of real estate deals – and there’s little wonder as to why. After all, it’s only natural that homes in popular areas would command higher prices than properties in less desirable locations. Just as location is an important factor for homebuyers, so too should it be for flippers. So, if you’re unfamiliar with the areas in a city or township, make sure to do your homework before proceeding to invest in prospective flips.
How Much of a Profit Do You Stand to Make?
On paper, the ultimate goal of house flipping is a simple one: make more than you spend. However, depending on how much work a certain flip will take, it may not be worth your time and resources. Even if you don’t technically stand to lose money, making a small profit after putting a tremendous amount of effort into a flip can prove extremely disappointing. After all, this is time that could have been devoted to more profitable real estate ventures. If you consider your time precious, make sure that any high-maintenance flips you come across stand to turn a handsome profit before throwing yourself into them.
Do You Know the Right Contractors?
Unless you intend to do the bulk of the work yourself, it’s important that you know the right contractors. Many of the most successful flippers work with the same people repeatedly, which often helps ensure efficiency and a high quality of work. Conversely, working with entirely new crews on each flip is practically guaranteed to produce inconsistent results. This isn’t to say that the contractors with whom you work the best will always be available, but if your contacts include hardworking individuals you can trust, make a point of working with them as often as possible.
House flipping holds a lot of appeal for people looking to turn a respectable profit in an expedient manner. Additionally, given how effective house flipping can be at generating income, there’s little wonder as to why. Still, not every flip goes off without a hitch, and if you’re not careful, you could wind up investing in a money pit. Fortunately, taking the time to gather sufficient information and make an educated decision can help prevent you from wasting time and resources on unfruitful ventures.