Investing in real estate has always been a well-known way to earn good money. Ownership investments, property rentals, profitable house flipping strategies are just a few of the many great opportunities to start building wealth.
Flipping houses for profit is an age-old concept that has helped many real estate investors earn quite a decent income.
Buying and selling a home within a few months turns out to be a very profitable business. If you’re willing and able to do the work.
In simple words, flipping houses means buying property under the market value, because of their disagreeable condition, transforming them into a home and selling them for profit in the same calendar year.
While the business model sounds sounds simple, what goes on behind the curtains is more complicated that it seems. They make it look like fun on TV, but in reality things are a tad different.
However, this investment strategy has the potential to bring in more than a decent income. If you play your cards right, you could earn as much as 6 figures per year.
Here are some profitable house flipping strategies to take into consideration if you’re thinking about investing in real estate.
1. Learn as much as possible about house flipping
As with any other business, learn about house flipping as much as you can before you buy your first house.
- How to buy a house?
- Is it better to take out a mortgage, pay cash or apply for a HELOC?
- How much do repairs cost and what’s the after repair value?
- What’s an after repair value?
Familiarize yourself with as many house flipping fundamentals as possible to understand the risks and avoid losing money!
2. Learn about home improvement strategies
House flipping is all about repairing a damaged house so you can sell it for a high profit later on. However, if you focus on the wrong house improvements, you might end up losing money.
There are home improvements that increase a home’s value, then there are those that don’t affect your selling price at all. Since you’re going to invest your own money in a run-down house, learn which repairs are advantageous and which aren’t worth it.
Chances are buyers will want to add personality to their future home anyway, so don’t waste your money and energy on the little stuff that’s not going to increase the property’s value.
3. Build your network
.. of contractors, other house flippers and a good realtor.
If you’re thinking about getting into house flipping full time, you should start building a network as soon as possible.
Knowing someone who’s already flipping houses for a living could help a lot in the long run. Having a mentor is a huge advantage when starting out.
You’re probably going to list your home with a realtor. It won’t hurt to start looking now for one who can help you get the best deal when you’re about to sell (hopefully in the very near future).
Last but not least, contractors. House flipping is serious business, so it’s not ideal to rely on cousin Jimmy to help you out with the plumbing and landscaping! Hire some professionals and make sure to stay in touch for future projects.
4. Know your target market
This is a valuable lesson to learn for all business owners, actually. It doesn’t matter whether you’re trying to sell a small, white picket fence home or sell a luxurious villa. Know who your target market is and what do they want and need.
You’re about to buy a property. That’s a huge financial commitment, so you’ll have to make sure your target market will be interested in buying!
Is the property you’re about to flip in a good neighbourhood? Does your target market include families with children or retirees?
It’s important to know everything you can about your potential buyers. It will help you a great deal if you know who you’re renovating the house for.
5. Learn how to price your house
Ideally, you should purchase a home that needs little time and money to improve. You’re not buying it for yourself, so you should invest as little as possible in order maximize the profit.
However, regardless of the mount of money you invest in repairs, you should never overprice the house!
Snoop around before selling. See how much houses sell for in that particular neighbourhood. Don’t overvalue yours, or you’ll get stuck with it instead of selling.
Of course, there a lot more to flipping houses than just building a network of contractors and knowing your target market.
By educating yourself as soon as possible, you’ll get to learn all about profitable house flipping strategies so you could start this business right foot forward.
Have you ever flipped a house?
Are you thinking about investing in real estate in the near future?