Are you getting ready to buy your first investment house to flip? Don’t jump in too fast. There are a few things you need to know first. The real estate flipping market has reached record highs since the last housing crash. If you don’t do your due diligence, then you’re going to miss the great deals. So, you’ll need a guide to get started the doing it the right way.
Here are five helpful tips to get you started on the way to making your first flip a success.
1. Invest in Growing Areas
Sure, you can play it safe and buy in areas that have been established already. The problem with this is that it’s going to be hard to find a good deal. You’ll have much better luck by investing in regions that are growing in popularity. Other investors can miss these areas. If you’re patient with these properties, then they can provide some of your best gains.
2. Don’t Over-Improve
It’s easy to go overboard and buy the latest and greatest of everything when renovating a home. But this is a mistake when these improvements won’t make you more money when you sell. Every improvement you make should add more value than it costs to do. Make sure you scrutinize every renovation you consider to make sure it makes sense.
3. Get a Professional Inspection
Are you looking at a house that has been on the market for a long time? Yes, you might be able to get a good deal on it. But there could be a good reason why it has been sitting so long. Make sure you get a professional inspection before you buy anything. You want to uncover any significant problems that will eat up your profit margin. Small issues are fine. But the last thing you want is to do major updates to your flip.
4. Have a Backup Plan
Things don’t always go as planned in the flipping game. You need a backup plan if you can’t profit from your deal. A common backup plan is to put the property that you’re flipping on the market as a rental. Doing this allows you to build more equity in the home and bring in some income to help pay for it.
5. Stage the Home Correctly
A lot goes into making a successful real estate listing. One of the most important is how the home buyers perceive the house on the first inspection. Take the time to stage the most important parts of the home well. This simple process can increase the perceived value of a house on a small budget.