According to Zillow, the average price of a home in the United States in 2023 is $334,269. However, the cost depends on a variety of factors, including size and location.
Recent home improvements are also a huge factor in pricing a home. A home that’s falling apart isn’t nearly worth a home that just recently underwent a renovation.
If you love real estate and home improvement shows, you may want to consider a career as a house flipper. It’s fun and a great way to earn money.
If you’re looking to learn how to flip a house, keep reading. We’re sharing with you our favorite tips on flipping houses.
Every House Flipper Should Inspect a Property Before Making an Offer
A picture may be worth a million words but relying solely on photography isn’t a smart way to make money. Buying a property without viewing it first puts you at serious risk for investing more money than you have on costly repairs.
Always pay for a professional inspection before you purchase a home. Then you’ll have an accurate assessment to help you create a detailed and accurate budget plan.
You’ll also be able to get a better idea of how long repairs will take and how much money you can earn once you sell the newly improved property.
Get a Building Permit
If you’re handy with a hammer and nail, you may have the skills necessary to renovate a home by yourself. However, you still need to go through the proper channels to get the right permits.
Failing to do so can lead to fines, lawsuits, and other unwanted complications. All of which can prevent a sale from going through while costing you big bucks.
Don’t forget to check your local building codes and get the right permits before you begin any work.
Renovate with Your Target Buyer in Mind
Before you begin any work, write down a list of qualities your prospective buyer has. The more you know about who the right buyer is, the easier it is to determine what type of work you should put into the property.
You’ll also have a better idea of how to price the property and what that buyer will expect to pay. Otherwise, you’ll either put in too much work or not enough and end up with a home you can’t sell.
Scout Out the Right Locations
Do some research to find out where there’s a market for renovated homes. The best places to look are either in a neighborhood that’s already desirable or one that’s on its way up.
You can improve a home but you can’t improve safety or personality of entire neighborhoods. Look for locations with rising real estate sales and decent employment growth projections.
Avoid areas where the local economy is spiraling downward, there’s a lot of crime or there are a lot of homes for sale. You can also go one step further and check the National Sex Offender Public Website to see if there are any registered sex offenders living nearby.
Work with a Real Estate Agent
It often pays to work with a licensed real estate agent. They know the trends, the neighborhoods, and the appropriate steps to buy real estate.
They can help you find the perfect house to flip. They may even have some additional tips on how to start flipping houses.
Real estate agents also know how to negotiate so you get a great deal on your home.
Be Aware of the Risk Factors
There are no great rewards without risks. House flipping has a lot of risks associated with it.
Before you get started, study and learn from the various risk factors. Learn how you can either eliminate or at least lower your risk factors considerably.
Understanding the risks involved allows you to create a concrete plan on how to find the right resources when potential problems arise. Otherwise, you may end up stuck without a viable escape plan.
Fix Only What’s Necessary
Flipping houses isn’t about creating someone’s dream home and selling it to them. It’s about renovating a home so you earn money on a sale. Otherwise, you stand to lose money because you spent too much on unnecessary renovations that a buyer may not even like.
Don’t over-improve on items such as light fixtures or appliances. These are items the buyer can do for themselves after you’ve sold them the home.
The only time you should go the extra mile is when you’re renovating a multi-million dollar home. That type of flip needs to be impressive.
Update Walls, Ceilings, and Floors
While you should let the new owners find the exact shade of paint they want, there are certain parts to a home you should always update. The walls, ceilings, and floors are always the first things potential buyers see when they walk into a home.
Stick with a basic shade of off-white for the paint, but update the paint both inside and outside the home, if it needs it. Remove old carpeting and refinish hardwood floors.
Know When to Call in Professionals
Just because you’re handy with a hammer and nails doesn’t necessarily mean you understand plumbing and electricity. Stick with what you do best and let the right professionals handle everything else.
You do not want to end up making a costly mistake or worse, injuring yourself or someone else because you took on a project you weren’t equipt to handle.
Get the Right Financing
Prepare a budget before you buy a home. Make sure you know you have access to enough cash to handle the project before you get started.
Finding the right source to finance your house flipping project will ensure that you don’t end up having to stop in the middle of the renovation because funds ran out.
Typical House Flipping Costs
Don’t forget to add in the following costs:
- Real estate commissions
- Closing costs
- Utility costs
- Insurance
- Property taxes
- Cost of repairs
- Adding expenses
And if you borrow any money, be sure to add in the price of interest.
Apply For Funding
If you’re a house flipper who has done their homework and found the right house to flip, we can help. Our loan program is specifically designed for people looking to fix and flip homes. Click here to apply now.