If you’re thinking about flipping your home, you should definitely do some research to prevent wasting your time and money. The worst situation would be starting a flip without the proper knowledge and having to live in a partially destroyed structure. Here, RISMedia offers some important factors to keep in mind before attempting to flip your home.
- Money is made by buying low
If you buy an inexpensive home, you will get a larger amount at the end. The renovation costs usually are between 25 percent to 33 percent of the purchase price. When you factor that in, you might see that if you sell the home according to market value, you might not make much money. There also are carrying costs and other potential expenses if things don’t go according to plan. To get a better idea, you might even have to consider potential losses.
- Obtain an inspection
Problems with the foundation, pests and wood rot could be waiting to happen in your home. An inspection lets you know about any problems up front and also can help you know how to handle them. Inspections usually cost a few hundred dollars. Before signing the contract, make sure that you have the required seven-day time frame to conduct the inspection. If the inspection comes back with problems you didn’t plan on paying for and they supersede your budget, you can safely get out of the contract with no penalties. You can even look in the fine print on your home warranty for more details.
- Let professionals do the job
You shouldn’t do the job yourself. Hire a general contractor and several sub-contractors to get the job done in a fast, professional way. The faster the work is done, the faster you can list and sell the home. When the property is completed, you can take the money and the extra time to look for the next deal. Real estate moguls make a lot of money this way. If you try to do it yourself, even if you have a background in construction, it could take significantly longer and you could lose out in the end. Placing the property for sale 1 percent to 2 percent below market value can make it more attractive to buyers and move it off of the market sooner. Using a real estate agent also is beneficial, because you have someone actively working to get your house sold.