Flipping real estate for a profit is not nearly as easy as some of the TV shows might suggest, but there are many professional house flippers who can attest to the profitability of this income opportunity. By following a few helpful tips, flipping houses can become a profitable and exciting income source for you.
Design the House to Appeal to the Most Buyers
One of the mistakes that many new house flippers make is to design the house with their unique taste in mind instead of considering what appeals to the majority of prospective home buyers. It is crucial to make color choices and design decisions that coincide with likely buyers. Demographic information can be helpful when remodeling a home.
When selecting paint colors, going with more neutral colors is highly recommended. Buyers want to move right in without having to do any work. By using neutral colors, more buyers will feel comfortable moving in without being forced to make immediate changes.
Buy Low and Sell Low
Successful house flippers report that they determine the profit on a deal at the time of the purchase. Paying too much for a house makes it impossible to make a profit in most situations. The goal should be to pay a very low price for a house and then to fix it up and sell it for less than the other houses in the neighborhood. If your ultimate goal is to sell it quickly, then you want to have the nicest house for the lowest price. Buyers will jump on a house that is nicer and cheaper than comparable properties in the area.
How to Estimate Repairs
A common tendency for novice house flippers is to underestimate repairs. Obtaining repair estimates and then padding those figures with at least 10 percent as an error margin is recommended. Some seasoned real estate investors go so far as to recommend doubling the repair figure to be sure you don’t pay too much for the house.
Staging the Property
Buying a house is emotional. When buyers feel an immediate connection to the house, they are more likely to buy it. For convenience, you could keep all staging furniture and décor in a storage unit so they can be easily accessible. This will make it easier to move these touches of comfort into and out of a home when needed. For example, I recently sold a home south of Denver, and we used a Colorado Springs CO self storage unit to stage so we could quickly move furniture in and out of the house when we needed to. Our home sold much faster because it was staged and appeared cozy and livable.
There is a success formula that experienced house flippers use. Buying a property for the right price and padding estimated repairs gives investors the best chance of making a profit. Prepare yourself to make a profit flipping houses with these four tips.
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