Many people invest in real estate properties and hold them over time to improve their finances and build up their asset base. However, another common strategy these days is to buy and sell a home quickly, doing it up via renovation or cosmetic work to “flip” it onto the next person for a profit.
This can be a lucrative tactic but isn’t guaranteed to go smoothly or give you the kind of financial outcomes you hope for. As such, it’s essential to be smart about how you go about flipping properties and be careful not to invest too much money into the remodel work you do before resale. Follow the below tips for improving the home you buy in an effective way for top results.
Work Out Your Overall Budget for the Project
When you’re flipping a property for profit, the numbers are something to keep an eye on constantly. It’s vital to create an overall budget for the project, so you don’t go overboard with the renovation and end up investing too much in to get a decent return on investment when you sell. Make sure you allow some extra money in your budget for the unexpected expenses that will no doubt pop up along the way, too.
Research Market Preferences
To maximize profits, do plenty of research before making home improvement choices. Get clear on market preferences about things like pools, bedroom numbers, smart-home and other tech features, and separate granny flats or offices. Find out if the predominant buyers in the suburb are singles, couples, young families, or retirees, too, and if buyers prefer big yards or low-maintenance ones.
Do purchasers look for lots of luxury fittings and fixtures or more budget offerings at lower prices? Are features for pets or young children going to help you sell your home quickly, or is it more about accessibility features or a big shed for the buyers in the suburb? Speak with realtors to get the lowdown and attend as many open houses and auctions as you can to get a better idea of the market.
Ensure You Have a Good Team of People Available to Assist You
To improve the home you plan to flip, you’re going to need a lot of outside assistance. Even if you have plenty of skills in renovating from past jobs, a flip is generally done as quickly as possible and thus requires multiple “hands on deck” for timeliness. Create a schedule for the work and project manage the job so everyone arrives to do their part as needed, in the correct order, to save time and stress.
Find yourself a committed, experienced, quality team of contractors you can trust to handle project jobs. You likely have to hire a builder, a carpenter, a plumber, and an electrician. You might also need to search for “licensed roofers near me” as well as a tiler, flooring specialist, painter, and landscape gardener in your area.
Cut Costs on Materials Wherever Possible
To maximize profits on your flipping project, look for ways to cut costs on materials. For example, re-use what you can that’s already in the home, such as appliances that still work fine or carpets that simply need a thorough clean. You might be able to buy the same tiles to match a few broken ones in wet areas, rather than doing a whole new floor or wall, too.
Tradespeople may be able to repair window and door frames, garage mechanisms, cabinets, and various other parts of the home to save you spending money on new products. Plus, consider painting over ugly tiles or an old bathtub and dividing plants already in the garden rather than buying new ones.
Take Advantage of Free Services and Tools
Lastly, don’t be afraid to take advantage of free services and tools to cut costs on your renovation work. For example, use blogs, magazines, and the like to get interior design and layout ideas. You may also be able to get an artistic friend to create some unique artwork to dress the home up with or borrow power tools from family members or neighbors rather than paying to buy or hire them.
You might even have a group of lovely people in your life who can help out with demolition work, gardening, or painting. It also pays to speak to people who have flipped properties before to get tips on dos and don’ts.
Flipping a home can be risky and stressful, but if you go about it in the most strategic way possible and look for ways to meet the market and cut costs, you’ll give yourself the best chance of success.