5 tips for newbie flippers
Flipping a house can seem like a fast and easy way to make a lot of money in a short amount of time. Unfortunately, many potential flippers underestimate how much time, money, and effort flipping truly takes. The following five tips will help newbie flippers make the most out of their investments – and avoid a major financial flop.
- Buy with your head, not your heart. When shopping for a future home, most potential buyers look for a house that gives them a warm, fuzzy, homey feeling. Shopping for a flip, however, is completely different. Instead of imagining your family growing up there, focus on the three L’s (location, location, location!) – as well as the cost. Homes in popular neighborhoods and those near transportation and services will sell faster and for top dollar. Avoid up and coming neighborhoods or rural areas for maximum return on investment.
- Stick with neutrals. Adding a few “personalized touches” throughout a home that cater to your design sense can be tempting. However, these features often only appeal to a small number of buyers and can make selling a flip more difficult. Instead opt for neutrals throughout a home; while it may not seem exciting or trendy, white or grey walls, neutral kitchens and baths, and plain carpets or floors appeal to all buyers. Leaving a flip a blank canvas allows potential buyers to imagine themselves living there.
- Choose mid-range over low end upgrades. Flips can be costly, but opting for low end upgrades, appliances, and hardware can hurt your asking price far beyond their low cost. Many potential buyers will view a home with all low end finishes as a “fixer upper.” This can lower potential offers as buyers factor in the investment they will make upgrading things. Choosing moderately priced finishes will cost a little more in your budget, but will make a flip more appealing when it goes on the market.
- Sell in the right season. When it comes to selling a flip, not all months or even days of the week are created equal. Before buying or selling a flip, study the highs and lows in your local market. While spring and fall tend to be the best seasons for sellers, buyers can often find lower prices during the winter and summer. Likewise, the day you list a house for sale matters. Thursday is considered the best day of the week to list a property. Brand new listings attract attention, and this gives potential buyers enough time to see the listing before the weekend.
- Set a realistic price. When your flip is finished and bursting with pride at the work you’ve done, it can be difficult to view a property with a critical eye. HouseHop recommends [http://www.househop.co.uk/property-guides/valuation/] having at least three real estate professionals give asking price estimates. Likewise, avoid realtors who give inflated estimates in the hopes of getting hired. Instead, look for a realtor that provides a realistic, mid-range estimate. Pricing the home well is the best chance of selling it fast and avoiding being saddled with additional months of taxes, fees, and renovation costs.