Thanks to HGTV, flipping houses is all the rage. Buying a fixer-upper and creating a dream home has become a very popular way to make money in real estate. With the right renovations and neighborhood, it can be a great way to make some extra cash flow. However, when done incorrectly, you could lose a lot of time, money, and energy. Check out these essential dos and don’ts of house flipping:
DON’T Invest in the Wrong Neighborhood
Before you begin knocking down walls and picking out wallpaper, research the right neighborhoods to invest in. There is no point in beautifying a home if no one is going to buy just because it’s in the wrong neighborhood. Many potential buyers look for nice parks, public transportation access, schools, and crime rates. Keep all of this in mind while searching for the right property to invest your time and money into.
DO Know Your Budget Ahead of Time
The house might be cheap, but the renovations could be a whole other story. When flipping a house, you need to know your budget way before shopping around for properties. You need to factor in the price of the house plus the costs of renovations. A more expensive house could mean fewer renovations and therefore might end up being cheaper to flip than a less expensive house with more renovations. Know how much you can afford before you flip.
DON’T Commit to a Project You’re Not Ready For
When flipping a house, you need to understand what your skill level is. If it’s your first flip, try to avoid houses that have major damages like a leaky roof, wiring issues, mold, and other time-consuming fixes. It’s also good to know when to seek outside help for renovations. Painting the walls and changing the doorknobs is one thing, but rewiring is a job for a professional. Don’t take on too big of a job that you are not ready for.
DO Price Your Flipped House Correctly
After all that hard work, you don’t want to cheat yourself right at the end. A rookie mistake when flipping a house is pricing it too high or too low. New timers either think their work isn’t worth much or believe they’ve designed a home for millionaires. Factor in the renovations, the neighborhood, and do your research before landing at the right price. All of your hard work and dedication of flipping a house can have a hefty payout when done the right way.