Mistakes to Avoid When Flipping a Home
If you know anything about fixing and flipping homes, there are more than a couple of pitfalls that could cost you deeply. So we’ll discuss pitfalls you can run into when flipping a house. That way, you can avoid them and make a great return on your investment!
Not Knowing the Local Housing Market
Before you even buy a home to flip, you want to consider if there’s even a demand for homes. And if you sell during an unfavorable market, you could lose money. As such, you want to flip a house when the market is leaning towards a seller’s or neutral market.
Do your research before flipping a house.
Taking on a Project Beyond Your Skill Set
You might see a house selling pretty cheap and is a bit of a fixer-up. But then you buy it and realize you bit off more than you could chew.
Committing to a piece of real Estate and knowing you can only fix certain aspects could result in extra labor and expenses.
And if the timing is not ideal, these extra expenses might not even be worth it. Know your budget, skill set, and what you’re willing to repair in a fixer-upper.
Another Tip: make sure home inspections are done on the property before you purchase it. That way, you’ll know all the issues before you take it on as a project.
Spending Too Much without a Plan
You might see a home go up for sale and see a lot of potential in it. So you start repairs but think this home could use a new paint job. There’s nothing wrong with the old paint. You don’t like it. If you continue down this path of replacing things for your preference, you may spend too much on the renovation.
When you’re trying to flip a house, remember you’re repairing a home to sell, not live in.
Have a plan and stick to what needs to be repaired. Refrain from thinking about what you want to see in a home.
Pricing the Home Too High
Once the repairs are done, it’s tempting to sell the house at an extremely high price. After all, you just spent a long time and a lot of money doing repairs. It seems only fair.
However, that’s not the approach you want to take. While it sounds like a good idea, a high price might keep people from even considering your home. It’s best to consult a listing agent who can give you an estimate of your fixer-upper’s value. Once you have their price, you can choose a price close to the agent’s suggestion. That’s perhaps the best way to go about selling your newly-repaired house.
Real Estate is a Stable Investment, But there are Risks
Real Estate has historically been a stable form of investment. Most economic analysts agree it’s a more stable investment than stocks or bonds. However, you want to invest the right way. Flip when the market is favorable, repair what’s necessary, and work with a Realtor® to price your home.