One of the many ways of making profit in real estate is ‘House Flipping’. Like the word ‘Flip’, it is like the property investor made a turn around decision to sell the property rather than keeping it for personal use.
You buy a property (especially an old one), rehab it into a good condition, then put it up for sale at a higher value.
In this blog post, we identified major ways you can profit from house flipping as a real estate investment.
What Is House Flipping In Real Estate
This is when a person buys an old real estate property at a low cost, renovates it into a better condition and resells it for profit. It comprises 3 major activities, buy – renovate – resell.
This method of real estate investment guarantees high returns, but it heavily depends on many factors like; the location, cost of acquisition and cost of renovating the property, as well as the current market value of the property.
Major Steps To Profitable House Flipping
Find the Right Property: What does it mean to find the right property to house flip? An old property in a good location and close proximity to important facilities is still a hot catch in the real estate market, especially a residential property.
You will realize that a whole lot of people are just wishing for the property to be in a good condition because they dread the renovation cost and process. What should you do? Find a property in a good location with high market demand and potential increase in market value.
Estimate Renovation and After Value Cost: Finding a property in a good location is not enough, you must also determine the overall cost of renovating the property. The cost of structural, electrical, and plumbing repairs, as well as the cost of acquiring property use permit and labor cost. Do not make the mistake of starting a renovation; you can’t bear the cost.
This is an important step you must not overlook, it will help you determine if you have the financial capacity to take on the renovation and if the property will still sell at a profitable price. Ensure you do your findings to know the value of property in that area and ask yourself if you will get a valuable return with the current market price? If the answer is yes, then you are good to go.
Negotiate and Close Property Purchase Process: Once you have determined the cost of acquisition, renovation and potential resale value, you can now make a purchase offer on the property based on the projected cost. You must close the purchase at a price that ensures your profit after deducting renovation cost.
Inspect Renovation Process: You must inspect the renovation process to ensure there is efficient time management and productivity. This will also help your renovation team adhere to the planned budget and timeline to prevent delays just so the entire process can wrap up on time. However, do not compromise on quality in the renovation process.
List Property For Sale At A Profit: When all renovation process on both the interior and exterior of the property is completed, it is time to list for sale in the market. You can seek the service of a real estate agent to maximize exposure and attract potential buyers for the property. The real estate agent will help follow the proper process to ensure you get the best returns on the property sale.
Conclusion
At Sterling Homes, we are not just about selling properties, we understand that owning a property is more than just an asset, it is an investment. This is why we always provide tips to real estate investors to ensure they maximize the full potential of their investment.
You can visit our website at Sterling Homes Limited to read up on other helpful content. You can also check out affordable property available for sales.