Property flipping went out of fashion back in 2008 but real estate data shows that the practice is back and is fast taking an upswing. Many high ends homes are landing up as property flips and the trend have extended itself even to the lesser high segments in the market. With more number of people following the trend; here are some important points that make the process profitable. Choose Balgores Property Group for all your sales and rental needs. A leading estate and lettings agent in Essex, matching people with perfect property services.
Introduction:
If a home has been brought and subsequently sold within a month of initial purchase, the process is termed as property flip. Flipping has been on the rise in recent years with market prices rising even when price levels are low. In other cases, people buy homes as a part of their business investment and sell them consequently on a higher price. It is possible to double the value of a home within 6 months but one need to understand the fine points behind.
1. Sensible purchasing
If you have already done a property flipping before, there you must already be aware of a second nature. There are some important steps in the process that need deeper understanding. Property sale offers need to be finalized on papers. It should be legally binding and not just a verbal commitment. In most cases, you will need to apply for a mortgage loan, unless of course you have that kind of cash ready. Examine the loans that will work with your plans. Loans with lower interest in the initial periods are the best as you are eventually going to pay in full soon, after the flipping is over.
• Property flipping can be risky as you aren’t sure to get the expected price. As it is, you are actually incurring a huge debt and some people eventually end up in flipping at less than the original price. The worries involved in a longer sitting period include continual upkeep costs, property taxes, rising interests of mortgages, etc.
• Property flipping also requires some DIY work. It now depends on your physical abilities and willingness in renovations and fixes. You can expect this learning curve to be steep.
• The property market is similar to the stock market with its share of bull and bear periods. If you can identify a bull market, the process will pay off well.
• Try and look for a home that has the potential of improvement in the least time and with little investment.
2. Developing your property flipping timeline
A well planned timeline is the ideal scenario. Time has always been considered as money and it should be your task to complete the renovation as soon as possible. Create realistic schedules for contracting, showcasing and selling. If property flipping isn’t your primary mode of earning bread and butter, you might want to wait for a vacation or long holidays to complete the renovations.
3. Renovations and fixings
Renovation demands doing the important fixes first. This way you can employ your budget into things that would matter more and the property will be ready to be shown to potential customers. Presentation can earn you huge money. The major fixes would necessarily include:
• Rewiring, fixing bathtubs, sinks, showers, re-flooring, re-painting, etc.
• Minor fixes like changing color schemes for brighter interiors, changing old fittings to modern ones, better storage spaces, etc.
• Typical cleaning
• Remodeling bathrooms and kitchens
Most of this work can be done by you. DIY paining and minor fixes will save you money you would have spent on contractors. Cosmetic changes don’t cost much but they are the first things a potential buyer would notice.
4. Selling the property
When everything is done and the house is set to invite potential buyers, it’s time to impress. Staged houses have 50%1 more chances in being sold out than un-staged ones. This would mean renting some furniture to be arranged in the house. Remove everything that show a personal effect of your life in the house – children paintings, family photos, holiday souvenirs, trophies. You want people to believe that it could be their new home and is ready to invite them in. personal items can act as distractions.
Don’t rely solely on brokers to help you sale. Advertisement can be hosted in websites, newspapers and even roadsides. Tap the potential of your social network!
Conclusion:
It’s great if you can earn profit out of your investment. However, if it has been long that a sale is due and the maintenance costs are rising, be prepared to sell it off at a lower price. Don’t allow your ego to be over your mortgage costs!
Author bio:
Madhumay Mallik is a content writer and photographer specializing on home improvement and architectural building ideas. He has been working for more than 5 years now to bring the most unique ventures to the limelight.
