Thanks to television shows like The Property Brothers and Fixer Upper, flipping houses for a profit has become an unshakeable trend in the real estate industry. However, the act has become so idealized that many newcomers choose to dive straight into flipping a house without taking the necessary precautions — such as researching market values, educating themselves on a home’s full history, or building a big enough savings for purchasing the home and executing all of its repairs.
Sometimes, even those who carefully take the previous steps end up floundering. Therefore, it is imperative we take the time to clarify the house flipping process and the mindset one must possess in order to make a profit.
Regardless of what others may say, flipping a house is much more than a simple side hustle. On the contrary, investing in real estate is an expensive proposition, requiring the funds not only for a down payment but for assessments and the remodel itself. Plus, even if you finance your purchase, every dollar will accrue interest, thus increasing the overall amount you must make in order to break even.
It is all too easy to get caught up in the whirlwind of house flipping and spend more than you allotted on renovations, often on the wrong things. Therefore, you should always put an emphasis on adding or repairing the items that add the most value to the home.
For instance, kitchens and bathrooms are often the biggest selling points, so do your best to ensure each of these rooms looks clean and modern. Additionally, landscaping is a key feature, as it is one of the first things prospective buyers will see. Therefore, it would be in your best interest to spruce up the front and back yards and clean up the exterior of the home rather than blowing your budget on crown molding.
Successfully flipping a house is akin to a marathon, not a race, as you want to make sure all of your renovations are not rushed or thrown together. Additionally, it is important to note that you will encounter unexpected roadblocks and obstacles, regardless of how prepared you think you are. So, be sure to keep a level head throughout the renovation process — even if it takes longer than anticipated — and remind yourself that the completion of this project will be worth it in the long-run.