Buying houses and fixing them up to raise their value, known as flipping, is a popular method of investment in the real estate world. There is potential for significant returns, and it is a repeatable process.
While it is lucrative, you can also potentially lose a substantial sum of money if done improperly. Some precautions you can take when looking for a house to flip will give you the best odds of making a good profit!
Assess the Foundation
The house’s foundation is probably the most important thing to look at when browsing the market. The foundation or skeleton supports the rest of the home, and the house could be at higher risk of damage if it is weak.
Upgrading a foundation can be a costly renovation, so it is typically counterintuitive for a flipper to purchase a home with a weak one. Important things to look for are water damage, termite damage, unleveled walls, cracks in concrete and rotted wood.
Any of these can be signs of foundational issues with the home and can run a high price later on.
Once you have found a home that needs work but has a solid foundation, you need to consider your budget. Separate from your budget for the house itself, you need to have a budget for your renovations as you look at what needs to be upgraded in the home consider if you can afford it and if it is worth the money being put into it.
If you can only afford to upgrade cabinets but need cabinets, flooring, appliances and paint, it will likely be way out of budget.
Location, Location, Location
Location is the only thing permanent about a home. No matter what you upgrade or tear down, the house will always be in the same place.
Potential buyers of the renovated home will consider the quality of the schools nearby, the distance to essential businesses such as grocery stores and crime rates. When looking at houses to flip, imagine yourself looking at a fully renovated home and consider whether or not you would buy it based on the location. If you have your doubts, it may be worth continuing your search.
Are you ready to begin your search for a new home? Contact us today to get started!
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