Flipping houses is still popular in the U.S. housing market. In fact, a report by ATTOM Data Solutions found that the home flipping rate hit a six-year high in the first quarter of 2018. While changes in the industry have affected the market, they are not stopping property investors from seeking out good opportunities. If you’re looking to start a home-flipping business – or re-start – here are three things to consider:
Create a finance plan. You may find a home that seems like a good candidate, but you’ll always want to compare the purchase price of the property to the after-repair value, or ARV. Calculating the ARV can be tricky but it’s key to figuring out if you’re going to make any money on a property. A good realtor can help you figure this out.
Be selective with properties. Neglected homes in good neighborhoods are a favorite of investors. So are homes with easy-to-fix cosmetic issues like peeling paint and shaggy carpets. However, structural problems, roof issues and faulty furnaces are more costly things to fix. That’s why a home inspection is a must.
Appeal to a wide audience. Put your personal preferences aside when selecting paint, cabinets and carpet. Try to make improvements that would appeal to a wide range of potential buyers. Consider neutral colors, for example, over daring color combinations.
The faster you complete the renovations, the faster you can market and sell the house and make a profit from your house flipping business.
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