Your Basic Guide to House-Flipping
Real estate investment never fails to amaze the average consumer when it comes to innovation and creativity. Truth is, real estate is a significant asset that never depreciates, making it the best investment option for those who have the financial resources to do so. If you’re fascinated with real estate innovations and want to commit to it for a hefty sum of returns, you’re in luck! This article will discuss the rising trend of house-flipping and how you can get started.
House Flipping: What is It?
You may have heard of this terminology before, but you may not be truly aware of what happens when you flip a house. House flipping refers to the process of a real estate investor purchasing a home or several houses to resell it later on.
There are two primary types of house flipping. One is where an investor purchases a unit, makes necessary repairs and renovations on it, and then puts it up for sale at a higher price. Another involves purchasing a house, then holding it for a certain period before putting it on the market for a higher resale value. When done right, you won’t waste thousands of dollars that you invested. Instead, you’ll be greeted with a significant amount of returns that you can utilize for another purchase.
Always finance house flips with cash
Before you start hunting for a unit to purchase, make sure you have the cash to sustain such a risky investment. If you want to take out a loan to buy a home, you might be in danger of putting your financial aspect at risk of default. When this happens, you’ll act in the desperation of selling your flip at a lower value so that you can pay your debt. One thing about house flipping that most people wrongly assume is the fact that it’s a quick-paced market; in reality, it’s not. You may have to wait for months and even years to realize your sales.
Get to know the market
A business has its not-so-glamorous and rewarding sides when it comes down to the technicalities. It takes time, effort and commitment to know the real estate market you’re dealing with. If you live in Brantford, such crucial information involves the affordable price range of the community, the market value of the property and the estimated cost of repairs and renovations, and the unit’s potential value that must be suitable for the community’s setting. If you don’t have the time but have the financial capacity to do so, it’s wise to find a real estate agent that can assist you with houses for sale in Brantford. An agent will help you in determining market value, establishing your vision for the renovation, and how you can sell it profitably.
Determine your budget for the house-flip
It is advisable that you assess your financial resources and capacity to guide you in determining your house-flip budget. The budget should include the purchase amount for the home, cost of repairs and renovations, and emergency expenditures. If you don’t know how much money to allot for the mentioned line items, it will help to have a contractor and a real estate agent guide you for an objective assessment.
Invest in efficient and smart renovations
There’s a big difference between investing in a custom kitchen and dining set, and making improvement tweaks that will undeniably boost your home’s value. Never underestimate the power of a fresh coat of paint, showerhead replacements, refinishing the existing furniture and fixtures, and replacing some appliances. This will make you spend less on a house flip.
Investing in the real estate industry is a high-risk high-reward type of endeavor. As much as you’d like to put yourself out there and crush the competition with your house-flips and unique concepts, there is charm in simplicity and cautiousness. If you don’t have any idea of what you’re getting yourself into, it pays to seek help from professionals in the field and let them do the rest.