Pay for a Professional Inspection
If you’re not in the construction business, it’s easy to miss some major defects of a property, from a faulty foundation to antiquated electrical wiring. Avoid an expensive headache by getting a professional inspection before you buy a property. The cost of an inspection is nothing compared with the price of hiring a crew to redo the roof or correct structural issues.
Get a Building Permit
While savvy, capable flippers can renovate a home themselves, failing to go through the proper channels may lead to steep fines, lawsuits, and other complications that can kill a sale. For example, banks and mortgage companies often hesitate to make loans on remodeled homes that don’t abide by local codes. Obtaining a building permit ensures peace of mind throughout the house flipping process.
Know the Neighborhood
Not all fixer-uppers are bound for success, and location is a major determining factor. Always think about the intended buyers when choosing a neighborhood. For example, if you want to market the finished home to families with young children, you’ll have better luck if it’s located in a safe neighborhood with schools nearby.
Hire a Real Estate Agent
Whether you’re buying or selling, hiring a professional real estate agent often helps you get a better deal, according to Zillow. That’s because agents know how to negotiate, and they have extensive knowledge of market conditions and comparable sales.
Don’t Expect Profit
Despite what you see on reality TV, house flippers aren’t guaranteed a profit. In fact, according to Time magazine, 12 percent of investors took a loss or barely broke even. If you go into house flipping as a business, expect to have a few less-than-stellar sales alongside your profitable ones.
Don’t Over Improve the House
When renovating a home, you may be tempted to add trendy details and high-end touches. Resist the urge! According to USNews.com, successful house flippers don’t over improve their properties. The more you spend on elaborate renovations, the higher you’ll have to price the house in order to make a profit, so it pays to stick with essential repairs and basic features in your fixer-upper.
Know When to Call a Professional
Enthusiastic flippers can get in over their heads during the renovation process. While replacing carpeting and painting walls are DIY-friendly projects, other repairs require professional help. Call a contractor for full kitchen and bath renovations, electrical wiring problems, plumbing and HVAC repairs, and room layout changes.
Have a Plan B
It’s a fixer-upper’s nightmare: The real estate market in your area takes a turn for the worse, preventing you from selling the house. This troubling situation becomes less scary when you have a backup plan. For example, you could consider renting the house until the market makes a comeback or you could offer owner financing.
Don’t Overlook Landscaping
Don’t underestimate the importance of curb appeal. No matter how much love you've lavished on a home's interior, an unattractive street view can drive away potential buyers. Although you don’t need to dump tons of money into retaining walls and raised flower beds, you should take steps to present an attractive exterior. At the very least, regularly mow the grass, trim overgrown hedges, and remove debris from the yard.
Don’t Quit Your Day Job
Heed the Warnings
Flipping houses can look like a fun and exciting side-business or hobby, but often TV shows don’t capture the tedious parts of this endeavor. If you still think this is the right project for you, just make sure to be prepared.
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