Flipping requires adding action plan to your investment property more value so it can give you the biggest return for your cash. In addition to rehabbing any obvious issues like leaky faucets, outdated flooring or broken ceilings, you also want to consider what people are looking for when they look at homes in your area.
Click to find out more, How To Sell a Fix and Flip Properties
Understand Your Location and Market
They say a home’s value is based on location above all else. 60% of the home’s value comes from where it is located on the map. Home prices may differ drastically as you move from neighborhood to neighborhood.A property that might be a great value in one part of town, may sell for considerably less just a few miles away. Make sure you have done your homework and have a good understanding of home prices in YOUR neighborhood.
You will also want to have a grasp on the demographics in the area. Who is buying? Families, seniors? What are they looking for, and what can they afford?
Don’t Over-Improve The Home
Remember that less is more. There are no guarantees that you will recover the costs you spend to fix it the property. Replace things that are not working or that appear very old, but leave it at that.
Do not sink money into a home adding extravagant details and upgrades. If bathroom cabinets are old and ugly, replace it with a simple (and cost effective) pedestal sink.
Just remember that no matter how many upgrades you make, a home will not sell for $500k, when the neighboring homes are going for $150k.
Price Your Home Before Anything Else
Before you sign the papers to buy the home, have the number in your head of what you will sell it for. Be careful not to inflate this number. You should be pricing low in order to get a buyer and sell the home fast.
Be realistic and stick to your numbers. Do not think that by making a $40k renovation to the basement, you will be able to add $40k to your asking price.
Review all your numbers before getting started, and keep in mind, repairs typically require more money than what you initially plan for, so give yourself some cushion.
Only Drop Once
When you initially price your home, give yourself enough room to drop the price once. Plan to make a significant drop of $5-$10k if the house isn’t receiving much attention at your original asking price.
You will only want to drop the price once. Dropping the price more often can make the house appear as if something is wrong with it, or that you are desperate to sell.
Before starting any real estate investment project, it is important to educate yourself and work with professionals you can trust.
