Many people choose to purchase property to ‘flip’ it for a profit. This means that they will improve that property in ways that will increase its value, and they can then use the profits to purchase their dream home or finance another real estate flip project. This can be a smart way to make some money and an opportunity to develop key skills when it comes to home improvement projects and understanding the real estate market. If you have never taken on a flip project before but have been thinking about doing so, here are some tips on how to achieve your goals.
Do Plenty of Research
Like any project, it’s a good idea to carry out some research before you get started. A lot of factors can impact a property’s value; it’s not just about the size and how pretty the house is, but also where the property is located, whether there are good transport links, schools, and so on. You need to think about all these factors before investing in a property to flip, as this will affect the overall selling price in the end. You might even want to choose a location that is considered up and coming, as you will likely get the property for a lower price, and it will go up in value as the area improves, which could work in your favor by the time you’re ready to sell it.
You will also need to research the average costs of home renovations to help you determine your budget. Some properties will require more intensive renovation work than others, and this is something you will need to think about before you purchase a home to flip.
Securing a Loan
Unless you’re lucky enough to have the money already together to finance your fix and flip project, you’ll need to apply for a loan to cover the expenses. You can apply for a loan with a bank, as many will offer these types of loans. Alternatively, if you want to have your loan approved quicker, you might be better off looking at private money lenders. When it comes to selling the property once you have completed renovations, you might want to factor in paying all or part of this loan back with the profits and incorporate this into the asking price when you put it on the market.
A Timeline of Your Project
You should also take the time to create a schedule for your renovation project, as this will help to keep things moving forward and give you some idea of when you will be ready to put the property on the market. It’s not unlikely that there will be some delays along the way, particularly if there is an issue with the supply chain for construction materials. However, having a realistic estimate of how long the work is going to take is important.
Apply for Planning Permission
Finally, before you break ground in any construction, make sure that you have the right planning permission for the renovations you’re planning to do. Otherwise, this could result in you having to put the project on hold until your local authority approves and could result in a loss of time and money.
