To many people, investing in the real estate business is a pipe dream. It requires a large capital and the market can be highly volatile. But if you think about it thoroughly, you can make some serious money through house flipping.
What is Flipping and Why You Should Consider It
In short, flipping is when you purchase a property for a low price and repair and furnish the house, before listing it for a profit. House flipping can be highly lucrative as the listing price can be twice your purchase price and repair.
On average, a house flip can make about $50,000 for each property. And when you work with premium properties, this number can soar much higher. You are looking at the possibility of earning $300,000 per property. But of course, it all starts by choosing the best property.
How to Choose the Best Property to Flip
- Cheap isn’t always the best
At a glance, house flipping looks like an easy project. You just need to find an abandoned and inexpensive house, repair it, and list it. But going for the lowest price may not be the best strategy.
A cheap house often comes with various issues. You may have to fix the plumbing, roof, and insulation, termite infestation, or maybe you have to tear down the whole house altogether.
- Location Matters
When it comes to property, location is key. A promising property will always located near a landmark or transportation hub. In many cities, they build the city in squares or circular manner, circling the market or the largest train station.
Understanding the surrounding area will help you promote the property. You can use attractive information such as nearby café and deli. Or whether the property is near public spaces.
- Always do the due diligence
Many house flippers choose to ignore the house’s history. In many cases, you only need to know the history of a few decades back. But if the house has a unique room or other details, then you can consider preserving the details or tearing the house altogether.
Things to Consider Before Flipping
- Unpredictable profit. Sometimes, your profits can be high enough to cover the next property. But some other times, your profit is enough to pay for the rent.
- Licenses can be expensive. Most states don’t require you to have a real estate license to flip, but having one can be highly beneficial. You don’t have to pay an extra fee for a broker and can speed up the purchase and listing process.
- The property may take a while to sell. At best, you can sell the property within two weeks after you complete the repair. But most of the time, you may have to wait for several months.
The real estate market also affects your effort to flip a house. So you need to know whether you need to adjust the listing price or not. At any rate, despite the risks, house flipping is an attractive job that can earn you a lot of money.