Considering a career as a real estate dealer? In the real estate business, “flipping” means purchasing a property at a low price with the intention of increasing its value through repairs and subsequent sale. Maximizing the return on investment means making improvements to the property with minimal outlay of cash. One profitable flip can yield tens of thousands of pounds for many investors. Here are a few suggestions for making money when you flip property.
Photo by Monica Silvestre
Set A Budget To Flip Property
One of the worst things about flipping houses is that you need a lot of money right away. This needs to be enough money to cover the deposit on the property and any improvements you want to make. In most cases, you’ll need at least £30,000.
Figure out how much money you can spend if you want to flip property. It’s important not to go over your budget so you don’t have to take out extra loans that could hurt your long-term profits.
Inspect Properties Thoroughly
Before you buy a house to flip, you should always check it out carefully. This will give you a good idea of how much work needs to be done and whether you can afford it. Don’t buy a property without doing your research, or you might end up with more debt than you can handle and be unable to flip property successfully – or at all.
A lot of people buy homes at auction. A few weeks before the auction, a catalogue is usually sent out. During this time, try to see any properties you might be interested in bidding on. Find out as much as you can about the property and how it is kept.
Shop Around For Loans
Few people can afford to buy a house outright, and this is especially true for first-time investors. Getting a mortgage is the only option.
Investors who want to flip property might apply for specialised private loans. These often need sizable upfront costs (about 20%), but they may also come with benefits like being interest-free for the first 12 months (this allows you to work on improving the property without having to worry about mortgage repayments).
Identify The Biggest Value Boosters
You might want to do a lot of different things to improve the property. Try to concentrate on the changes that will make the most difference (without costing too much in the process).
What are some big ways to boost value? First, you should fix any damage that you can see. Roof repair can often add a lot to the value of a home. Next, think about adding a new bathroom or kitchen if the one you have now is old or worn. This can help increase the value by thousands. Lastly, if the property has a garden, clean it up and give it a fresh coat of paint. Keep the decor simple so that as many people as possible will be interested.
DIY As Much As Possible
You want to spend as little money as possible on making the house better when you flip property. Putting in work is a great way to make sure of this. This means making as many changes as you can on your own so you don’t have to hire contractors.
Some jobs, like electrics, plumbing, and roof repairs, can be dangerous if you don’t know what you’re doing. It’s best to hire a pro for these jobs. But you can save a lot of money by doing things like painting, tiling, landscaping, and laying floors on your own.