Avoid These Mistakes When You Flip a House
In the last decade, flipping houses has become incredibly popular thanks to many television shows that make it seem like an easy way to get some cash. “Flipping” a house means buying a house that needs major work, doing the repairs, and then selling it. To make money, you need to be aware of some potential mistakes and be careful to avoid them.
Failing to Learn About Real Estate
You may think all you need to know is how to fix houses, but you need to understand real estate trends and laws, as well. You need to know what areas in your region are becoming popular and what price you are likely to get for the finished home. Many cities have sections that are not safe or that are becoming rundown. Even a flipped home might be hard to sell in these locations. You do not have to have a real estate license, just use a computer and research the area to find where people want to live. Once you have studied prices, you will know a good deal when you see it.
Forgoing a Budget
Before you even purchase the first house to flip, you need to find out what resources you have available to use. Trying to flip a house without a budget is almost a guarantee to fail because you may spend money that you do not have and cannot get back when you sell the house. You need to have a detailed plan for your money before you begin looking at houses. Plan how much you can spend on the house and for each area in the house for repairs.
Proceeding Without a Plan
As you walk through the house, you need to come up with a plan before you start to remodel the house. If you try to start remodeling without a plan, you will end up spending more money than you can afford. Inspect each room carefully and decide what needs to be done. When it is time to start demolishing the rooms, you will already know what needs taken out and what needs to be saved. Remember to save money for hidden expenses, such as problems with electrical or plumbing.
You also want to try to prioritize certain components of the house over others. Make sure you are putting most of your money into the important components of the house like the roof, foundation, insulation, and other structural components. For example, according to the specialists at A-Top Roofing, “When it comes to the scope of a renovation project, few jobs impact as many visual areas of the home as the roof does. However, besides being one of the most visible aspects of the home from the street, the roof also provides shelter from the elements, which makes it important from a functional standpoint as well.” This virtually guarantees that the roof is going to be one of those house components that you should prioritize. Spending all of your time and money on superficial elements of the house will result in a house that looks good but isn’t a good investment.
Decorating According to Your Own Tastes
When you begin to choose colors and the design for the house, make sure you are choosing neutral shades that will be popular with many people. You do not want to paint the rooms to suit your love of bright colors because this will turn potential buyers away. While most will paint the rooms to suit their tastes after purchasing the house, you want the house to showcase its possibilities, not a rainbow of colors or an eclectic design.
Falling in Love with the House
Many people pour so much time and money into projects that they fall “in love” with the house and only the best is good enough for the project. Not only will this make it hard for you to sell the house, but it can also kill your budget and time frame for getting it done.
Avoid these common mistakes to make flipping houses a fun way to earn some extra cash.