Property flipping is a boom time enterprise. When times are good the property market heats up. People buy a house, repair it quickly, and sell it for a profit. It’s a quick and simple cycle that works best when the market is riding upwards. That’s the house flipping business model in a nutshell.
But is this model still viable? Neale Whitaker, from the renovation-themed reality show The Block, talked about his strategy for extracting profits from fixer-uppers. Whitaker recently sold his Sydney home for a profit of $750,000. That’s just two years after he bought it. Here’s a breakdown of a recipe for house flipping success.
Focus on potential
The trick to selling a house for a profit is to seek out potential. There’s no way buying a prime piece of real estate in a prime location is going to yield high returns. House flipping involves seeking out bargains in good locations. Once you’ve spotted a good location, you must seek out houses that are in bad shape. Bargain prices are possible on properties that are somewhat squalid. A change in local infrastructure could also be something to look for. A new highway or airport could shift property prices much higher.
Grab a bargain
Buying below market prices is essential. Flipping a house depends on buying cheaply, repairing efficiently, and selling at the right time.
Keep costs low
Most professional investors and industrial designers have a network of contractors that can repair a house. Economies of scale allow big players to get house repairs completed for a fraction of the cost. That doesn’t mean smaller players can’t get involved. For the average investor, DIY repairs or remodelling are the best options. By saving money on essential repairs, investors can add value and broaden their profit margin.
Buying a house is an emotional decision. Some of the most successful property investors understand the value of aesthetics and style. Well designed properties that promise a certain lifestyle and quality to buyers are more likely to sell quick. A stylish apartment or house is also likely to fetch a higher price.
Most investors and house flippers make the mistake of expecting quick results. House flipping is a tedious and time-consuming process. Projects often go over budget and beyond schedules. But patience pays in this industry. Plan appropriately and hold on for the long-term with every project.
House flipping is still a viable business, but it’s not easy. Finding bargains on the housing market is difficult. Getting repairs done within budget is nearly impossible for most beginners. The housing market has suffered a major setback in recent years and returns have dwindled. But with careful planning and meticulous research, it’s possible to sell a house for a profit. The house flipping market has recently started to expand again, so now might be a great time to start.
Article Submitted By Community Writer