One of the main buzz words when it comes to property development and investment over the past couple of years has to be house flipping. Many people find that it has become one of the most lucrative ventures in the real estate world, allowing people to have a massive return on their property investment. Property flippers are finding huge profits through targeted and calculated property flipping. However, what is house flipping, and could it be a viable business idea for you?
House flipping is a real estate strategy which involves investing money into a home that needs a lot of structural and aesthetic work – but usually has a lot of potential. These could be homes built in a different time period, as Victorian and Edwardian homes that have unique features are very popular in the world of property flipping. After the home has been completely renovated, the home will then be sold in a very short amount of time. Flipping homes can be very successful and lucrative, as long as you have the right skills, experience and knowledge.
Many investment commentators have suggested that house flipping may no longer be viable due to the rising costs of the housing market, alongside recent supply issues that may have affected construction. However, house flipping is still viable, and will be as long as there are homes that have huge financial potential. Real estate can be time-consuming and costly, but can offer huge returns if you play your cards right. However, doing your research and finding out how much time, resources and money you will need before starting the project will help you make the best decisions when it comes to flipping homes.
If you’re looking to start property flipping as a business, you should make sure that you are well educated when it comes to the market.
One of the most important parts of starting a house flipping business is to make sure you have enough money and resources. In house flipping, there is a 70% rule. This rule means that property investors should spend no more than 70% of a home’s after-repair value (ARV) minus the renovation costs in total. This will help guide you on how much money you need to have, what you should be ideally spending, and how to stay on track when it comes to property flipping. This will also help you to maximise your profits after sale!
If you plan to advertise your property flipping services to other real estate investors, it would be a good idea to invest in advertising your services. Firstly, it’s essential that you have a website, as that is how most people find professional services in the modern era. A website design agency in Manchester found that businesses that had a good website were over half as likely to get customers than those who did not. Furthermore, investing in certain marketing efforts could go a long way if you want big-time property investors to use your property flipping services. Invest in your digital presence and marketing today!
One of the biggest mistakes home flipping companies make when it comes to taking on a new project is to not do their research. Choosing the right property and the right location is essential if you want an amazing property that has the potential to make you a lot of money. For example, if you buy a home in a £100,000 neighbourhood, don’t expect your home to sell for £350,000. Being selective about your choice is half of finding a lucrative investment that will produce great profits. You may also need to know about local tax and construction laws, so you can work within the law after your investment and don’t risk getting into trouble.
Another major mistake that home flippers make when it comes to their investment is not knowing when to outsource and get someone else to do it. For example, if you’ve bought a home with a particularly tricky kitchen area, you should hire a kitchen remodelling service so that you can focus on other areas of the home. This is essential if you have limited experience in certain areas of property renovation, so you can maximise your profits. It could cost you a lot less to outsource certain areas of renovation than it would cost to fix mistakes you’ve made! Thoroughly assessing your skills and factoring in the cost of hiring professionals to help where you’re lacking is essential if you want to maximise your profits and make the most out of your investment.
True house flipping professionals don’t rush into buying property just because it’s there on the market. Many beginner property flippers make a huge mistake because they buy the first home they see. Instead, they wait for the right property to come along that is more likely to be a good investment. Furthermore, many novice home flippers use the first contractor that they see – instead, a professional will rely on a network of construction professionals that they know will do the work well. Understanding that flipping a property could take a lot of time and energy is essential if you want to make a good profit – simply slapping on a coat of paint will not get you the return you want.
Following local property laws and regulations is essential if you want to protect your business. A criminal lawyer in Melbourne found that many people ended up in legal trouble because they failed to secure the safety of their tenants in property renovation. If you don’t follow safety protocols in regards to both your worker’s safety, and the structural integrity of the property, you could end up in a lot of trouble. Protecting yourself throughout the entire process by hiring lawyers and professionals that ensure you’re on the right track will be essential for securing the legal validity and value of your property investment.
House flipping could be extremely lucrative if you take care to protect yourself and do your research. Ensuring you have the money, time, patience, knowledge and skills to properly renovate and flip a property will protect you and help you protect your investments. If you’re considering starting a property flipping business, make sure that you follow some of these essential tips and tricks in order to protect your business. Understanding the risks and commitment it takes to flip property will help you in the long run – so start doing your research today!